Posted In:

Lending, Gates-Lambda


#283
Selling A Stake

Published:

Apr 13, 2019


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Posted In:

Lending, Gates-Lambda

Published:

Apr 13, 2019


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With outstanding student debt ballooning to over $1.5t in the US, more and more students are choosing to sidestep traditional debt financing for education.

In turn, ISAs (otherwise known as income share agreements) are now en vogue at some of America’s largest universities. Purdue University is one of the many colleges that now allows its students to trade part of their future earnings in return for college tuition today.

Similarly, the Lambda School is an entirely virtual school focused on coding and software training that offers its courses at no upfront costs in the hopes of meritocraticizing higher education. Instead of paying tuition, students pay 17% of their income earned for the first two years after they’re employed – but only if the job pays more than $50,000 a year, and the contract is maxed at $30,000 of total income dollars paid.

Future upside agreements have not only resonated with students, but with private investors who are seeking new forms of returns through buying stakes in students. The Lambda School has just raised a fresh $50m tuition facility, and universities with ISA programs are fielding calls from large investment managers keen to understand this developing space.

With an equity market for students evolving, we have to wonder if choosing rising high school students for ISAs will look something like a college draft? If so, we know who we are choosing…

Portfolio News


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Embroker Raises $28m Series-B from Tola Capital - Huge congrats to FTC I portfolio company Embroker on their $28m Series-B raise from smart money, Seattle-based investor, Tola Capital. The round includes participation from Canaan Partners, Bee Partners, Manulife Capital Ventures, Nyca Partners, and XL Innovate. Read more

Canada's money laundering problem in the 'hundreds of millions': financial crimes expert - Stuart Jones, CEO of portfolio company Sigma, joins BNN Bloomberg to discuss how machine learning can be used to evaluate companies' and banks' non-credit (e.g. financial crime) risk. Read more

Selling A Stake


Lambda School lets you pay your tuition by essentially selling shares in your future self -The Lambda School now has 1,300 students enrolled with an early job placement rate of 86% and a median starting salary of $60,000. Read more

College grads sell stakes in themselves to Wall Street - According to Bloomberg, the growing field of Income Share Agreements is not without its drawbacks - how much that contract ultimately costs a student is completely dependent on the early trajectory of his / her career. Read more

Industry News


Travelex owner Finablr plans $3b London float - Finablr, the UAE based the payments processing group behind the Travelex and Xpress Money brands, is planning for a London flotation that would value it up to $3b. Read more

Frustrated by the tech industry, small banks start to rebel - A great story in the WSJ highlighting the dependency smaller banks in the US have on "old school" inflexible core technology providers like Fiserv and FIS. Read more

Technology giants move into banking - A recent report by BIS highlights that big tech’s advance into the financial services industry is gathering pace. Whilst big tech companies extend less than 1% of global private sector credit, their share is growing as they leverage their data-gathering prowess and machine learning to analyze credit data more precisely. Read more

Australian regulators cautiously embrace AI to boost compliance - Australian regulators, bruised by the royal commission, are turning to artificial intelligence to boost compliance across the finance industry. One recent pilot involves deploying software to scrutinize financial planning documentation to ensure they do not contain problematic advice or breach rules. Read more

N26 is second banking 'unicorn' to face regulator's questions - App-only bank N26 has become the second billion-dollar European banking startup, alongside Revolut, to face questions over compliance. Read more

Coinbase launches cryptocurrency Visa debit card in UK - Coinbase has launched a new Visa debit card in the UK, allowing customers to make purchases and cash withdrawals directly from their accounts. The company has partnered with Apto Payments, previously Shift Payments, to enable the capability. Read more

China, home to the world’s biggest cryptocurrency mining farms, now wants to ban them completely - China’s top economic planning body has proposed new rules that would see the closure of all local cryptocurrency mining facilities if enacted – a move that would necessitate a massive reshuffle of the global industry and end China’s dominance of the sector. Read more

Brazil central bank liquidates Banco Neon a day after raising Brazil’s biggest-ever series A - Brazil's central bank suspended the operations of Neon Pagamentos a day after the start-up had raised $22m in Brazil’s biggest-ever series A round of VC funding from Propel Venture Partners, Monashees, Quona Capital, Omidyar Network. Read more

YieldStreet acquires Athena Art Finance from Carlyle and co-investors- Close on the heels of their Series B financing, YieldStreet has acquired Athena for a reported $170m. Athena is a pioneer in the global art finance market, providing art dealers, galleries and collectors access to financing alternatives secured by fine art. Read more

GM, BMW back blockchain data sharing for self-driving cars - The Mobility Open Blockchain Initiative (MOBI), a consortium formed last year to harmonize the development of DLT across the car industry, is using Ocean Protocol to create a data sharing standard and use federated machine learning to help OEM's get autonomous vehicles on the road quicker. Read more

LendInvest gets £200m backing from HSBC - UK based mortgage marketplace has raised £200m in debt capital from HSBC. The incremental financing is rumored to portend a potential IPO. Read more

Select Financings


Blockstack - New York based decentralized web infrastructure platform has filed to raise a $50m token sale that would leverage the SEC's Regulation A+ crowdfunding exemption. Read more

Branch - San Francisco and Kenya based mobile lender for Africa has raised a $70m Series C led by Foundation Capital. The company raised a $100m debt facility in conjunction with the round. Read more

Flexa - New York City based merchant crypto payment platform has raised $14m in a private token sale to Pantera, 1kx, Nima Capital, and Access Ventures. Congrats to Tyler and the team on the raise! Read more

Lemonade - New York based home and renters’ insurance startup has raised a $300m Series D financing led by Softbank. The financing values the company at more than $2b. Read more

Sparkswap - Atlanta based decentralized exchange built on top of Lightning Network has raised $3.5m Series Seed from Pantera, YC, Initialized Capital, and Foundation Capital. Read more


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