One of the prominent tech-oriented online student loan refinancing lender, CommonBond Inc., has secured new equity in a recent undisclosed investment deal. This deal is somewhat surprising given the recent trend of weakening online loan servicer funding, but it breathes new life into the investment game. More importantly, it affirms that investors still have faith in technologically-oriented online lenders, in this case a student loan lender.
The investment deal is somewhat shrouded in mystery. The actual identity of the investor is not known. On top of this, the evaluation of CommonBond is not being released, but it is known that this evaluation is higher than previous evaluations. Neuberger Bermen headed the $30 million in equity while CommonBond secured $300 million in backing for student loans. This move puts CommonBond past $1 billion in overall financing including equity and debt.
As to the identity of the investor, it was stated by the lender that the investor is a “leading global asset management firm.” At any rate, this is good news for CommonBond. The venture company is smaller than several of the main competitors in the tech lending industry. Competitors such as Sallie Mae are reported to having secured up to a billion in support for making loans.
Securing this investment is mainly due to the increase in business by CommonBond. The private student loan company is simply part of a growing traffic volume. Student loans are needed for the growing demand for college education, a demand that is spurred on by rising tuition. It is only natural that more supply is required to meet this demand.
CommonBond has not simply stopped there. The lender has also acquired a loan management company, Gradible. This simply aids CommonBond in overall loan servicing and management since this acquisition is meant to aid borrowers with repaying student loans. It gives them more of a grasp on the market, and the company can reach out to borrowers on multiple levels of the industry.
At the end of the day, this is a solid move for CommonBond that will aid future growth. It is normally good news to receive an investment from a “leading global asset management firm.” This news can only mean confidence in CommonBond and their services.