The eight-month-old firm is now trying to work with banks and non-banking financing institutions (NBFCs), as well as premier colleges in India, to provide credit to students as a result of the funding. Kuhoo, a student loan fintech platform, has raised $20 million in its first institutional fundraising round from WestBridge Capital.
Kuhoo offers digital loans to students applying to Indian and international colleges. The Mumbai-based corporation specialises in offering loans for higher education courses such as engineering, business administration, executive education, and online courses, among others.
“We combine advanced technology along with data science to create risk and credit models. These models help us evaluate students’ potential employability, and future incomes for various courses (that they) enrol in,” said Prashant Bhonsle, founder, Kuhoo.
Kuhoo competes with Propelld, which focuses on offering individual education loans, and Sequoia-backed Eduvanz, which lends to those wishing to reskill and upskill.
Propelld secured $35 million in a round headed by WestBridge Capital in February.
“With the rising costs of education, we believe that India needs loan providers who comprehensively understand the problems of students, parents, and academic institutes. Assessing future employability and income of students are two of the biggest challenges for existing banks and NBFCs that offer student loans,” said Deepak Ramineedi, partner, WestBridge Capital.
Fintech companies have been concentrating on providing financial services to students as well. Leap, which is funded by Owl Ventures and just raised $55 million in new investment, aims to give students insurance and foreign student cards and assist them with student loans.
The FinTech sector is predicted to grow at a compound annual growth rate of 22% over the next five years, and it is now the world’s third-largest FinTech ecosystem, behind the United States and China.
FinTech funding totalled $16.5 billion from 2016 to 2021, with around 60% of that coming in the last three years.
With stronger rules, digital lending is likely to grow at a higher rate, with an expected CAGR of roughly 33.5 percent by 2023, insurance at 12.5 percent by 2030, and neo banking at 50.4 percent by 2026.