FinancePeer, an artificial intelligence-based school fee financing model, has raised Rs 5 crore ($706,000) in an angel funding round from a clutch of individual investors, a top company executive told VCCircle.
Company founder Rohit Gajbhiye said the firm wants to partner with schools across the country and help parents put their children in a school of their choice without worrying about finance.
Investors who participated in the round include early-stage venture capital firm PitchRight Ventures; Manish Shah, a serial startup investor; Ravi Sanghvi, CEO at Ratnamani Metal &Tubes Ltd and Lotus Eduservices.
Gajbhiye, who is an alumnus of IIT-Bombay, launched FinancePeer in late 2016. Previously, he worked with Development Bank of Singapore (DBS).
Financepeer helps parents and students to pay their education fees in monthly instalments at zero interest and cost. The firm pays full year’s fees to education institution at the beginning of the academic year.
It has exclusive tie-ups with more than 250 schools and has processed more than 5,000 school fee loans on its platform.
Deals in the segment
The broader education financing segment has seen some significant private equity and strategic transactions.
In April last year, homegrown private equity firm ChrysCapital led an Rs 350 crore ($55 million) Series C funding round in Bengaluru-based school finance company Thirumeni Finance Pvt. Ltd, which operates under the Varthana brand.
In another significant transaction in the segment, Manappuram Finance Ltd agreed to acquire an 85.39% stake in Indian School Finance Company Pvt. Ltd (ISFC) for Rs 212.2 crore ($31 million) in July last year.
Hyderabad-based ISFC lends mainly to education service providers and other players such as book publishers, content companies as well as providers of computers, stationery, furniture and uniforms. It also offers education loans to students.
This deal, however, has run into a regulatory hurdle.
Other non-banking financial companies focusing on lending to educational institutions include Shiksha Financial Services India Pvt. Ltd and Auxilo Finserve Pvt. Ltd.
In December last year, Gray Matters Capital invested in GyanDhan, an education financing marketplace which has developed a proprietary model to assess the employability prospects of students for non-banking financial companies and banks to make education loan decisions.