Austin-based student loan benefits providerannounced yesterday it has raised $3 million in seed funding to continue its growth and roll out new products.
Student Loan Genius’ core product — Genius Match — lets employers contribute matching dollars toward employees’ student loan payments. Other services include Genius Advisor — which offers employees one-on-one advisory services and helps them identify the most suitable repayment plan — and Genius Pay, which deducts student loan payments directly from payment.
Co-founder and CEO Tony Aguilar started as a Capital Factory coworking member, and the idea went through several iterations before his company entered the Capital Factory Accelerator. One of Built In Austin's 50 startups to watch in 2016, the company’s services are currently used by 45 employers including Intel, Boeing, Teach for America and Kellogg's.
This summer, Aguilar presented for President Barack Obama during the first ever White House Demo day (see video here).
According to Aguilar, the tipping point in raising the new round was a new feature the company will be releasing sometime in the next few weeks.
"We can’t talk specifics, but this is what got two Fortune 100 competitors, Prudential and John Hancock to get involved," he said.
For many recent college graduates, assistance in paying down student debt is a lucrative perk indeed — a 2015 analysis of government data found that the average college graduate with student loans in the class of 2015 owed more than $35,000. According to The Wall Street Journal, that's more than twice the average for the class of '95 — after adjusting for inflation.
Asked what sets Student Loan Genius apart from competitors in the space, Aguilar emphasized his team's intimate familiarity with the problem it's solving.
"I think what sets us apart from the others is our awesome team that understands the problem because it’s OUR problem," he said. "That’s what shows up in our products and really resonates with the partners, investors and customers that are ultimately our muscle going forward."
The round was led by Prudential affiliate Gibraltar Ventures along with an affiliate of John Hancock/Manulife. It was joined by Kapor Capital, Capital Factory and Village Capital.
The round was Capital Factory's largest follow-on seed investment to date.
Image via Shutterstock.
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