NEW YORK, July 19, 2016 /PRNewswire/ -- CommonBond, a leading online lender that uses data and technology to lower the cost of student loans, today announced over $300 million in new funding. The influx of capital is a combination of equity capital to fund operations and lending capital to fund loans. Additionally, the company announced the acquisition of Gradible to build out a new employer platform for student loan repayment.
Neuberger Berman Private Equity led the $30 million Series C equity round, joining existing CommonBond investors August Capital, Tribeca Venture Partners, Social Capital, Nyca Partners and Victory Park Capital. Key individual investors in CommonBond include former Citigroup CEO Vikram Pandit, former Thomson Reuters CEO Tom Glocer and former Barclays Private Wealth CEO Tom Kalaris.
CommonBond will use the new equity funding to hire across the organization, build out its technology platforms for consumers and employers, and continue to scale its loan operations.
"Among the hundreds of fintech lenders out there, CommonBond stood out to us for its sophistication in underwriting, capital markets, technology and customer acquisition," said Brien Smith, Managing Director at Neuberger Berman. "It's still early days in online lending's disruption of traditional finance, and we believe CommonBond, with its world-class team and history of consistent performance, will continue to be a leader in the space for years to come."
In addition to the equity funding, CommonBond is announcing $300 million in loan purchases by a leading global asset management firm. With the new funding, CommonBond will surpass $1 billion in financing across equity and debt.
CommonBond also announced today its acquisition of Gradible, a personal finance platform founded in 2013 by Pete Wylie, Grant Biles and Lee Smallwood, that provides users with unbiased, personalized recommendations on how to better manage and repay their student loans.
With the Gradible acquisition, CommonBond now offers employers a full suite of student loan repayment programs for their employees, beyond CommonBond's student loan refinancing options. The new additions to the employer-based student loan repayment platform include:
- Assessment: Through CommonBond, employers will now be able offer all employees a comprehensive suite of tools to manage and save on student loans, regardless of income or credit history. The platform directs employees to the right repayment option for their specific financial situation, including federal government programs, such as Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF).
- Contribution: CommonBond now enables companies to contribute directly to their employees' monthly student loan payments, through a student loan contribution platform akin to a 401(k) matching program. The platform will allow employees to save money on their student loan payments, and employers to win over broad swaths of their workforce saddled with billions in student debt.
Millennials are increasingly requesting student loan repayment benefits in the workplace, and companies that offer it have a major advantage in recruiting and retaining top talent. While just 4% of companies currently offer this type of benefit today, that number is expected to reach over 26% by 2018, according to a recent Willis Towers Watson survey.
The Gradible acquisition makes CommonBond the first in the industry to offer the full-suite of employer-based student loan repayment solutions: assessment, refinancing and contribution.
The acquisition includes the addition of Gradible Co-Founders Pete Wylie and Grant Biles to the CommonBond team. Wylie led finance and marketing at Gradible, and will manage core finance functions at CommonBond; Biles was head of design at Gradible and will focus on UX design at CommonBond.
Today's announcement follows a string of significant accomplishments for CommonBond over the past year, including:
- Surpassing $500 million in funded loans
- Completing student loan securitizations that earned investment-grade ratings from Moody's and DBRS
- Becoming a direct lender, licensed in more than 40 states nationally
- Signing nearly 100 employer partnerships with companies such as Mercer, WeWork, Betterment, Skadden Arps and Dentons
- Funding the education of thousands of students in need through the company's industry-first "1-for-1" social mission
- Growing revenues by more than 3x year to date
Last month, the company was named to Inc. Magazine's Top 50 Best Workplaces in America.
"We've had a phenomenal stretch of growth this past year, and today's announcement powers even more going forward," said David Klein, CEO and Co-Founder of CommonBond. "Our mission is to have as broad an impact as possible on the financial health of consumers in the U.S. And with our new investors and our new suite of employer-based products, we're able to take our mission to the next level, now reaching all 40 million Americans with student debt, regardless of their financial profile."
CommonBond is a leading online lender that uses data and technology to lower the cost of student loans. The company believes that student loans should be simpler, more affordable and more transparent. CommonBond funds and refinances student loans, saving its members over $14,500, on average, when they refinance. In addition to savings, CommonBond offers a simple application process and friendly customer service to deliver a superior experience. The company is the first to bring the "one-for-one" model to finance: for every loan funded on its platform, CommonBond funds the education of a student in need, through a partnership with Pencils of Promise. For more information, visit www.commonbond.co.