Overseas students-focused lending platform Leap raises $5.5m in Sequoia-led round

Leap Finance, a fintech platform for overseas Indian students, announced it has raised US$5.5 million in a round led by Sequoia India.

InCred founder and CEO Bhupinder Singh and Cred chief exec Kunal Shah were also among the leading angels that participated in the round, according to a statement.

Leap Finance co-founders Vaibhav Singh (left) and Arnav Kumar / Photo credit: Leap Finance

Acting as a neobank for international students, Leap creates modern financial products and services designed specifically for Indian learners. The startup said its technology takes several alternative and derived data points into account to determine a borrower’s future income potential, then gives a loan offer in less than 10 minutes based on the results.

Its first product is a graduate student loan that can offer interest rates as low as 8% and full study cost coverage without requiring collateral. Leap said it is currently accepting applications from students pursuing graduate studies in the US in the upcoming fall season this year, looking to finance 1,000 students.

According to the statement, there has been a growing trend of students from emerging markets pursuing specialized education in more developed countries. Last year, about 5 million students pursued higher education opportunities outside their home countries, spending US$150 billion annually.

Vaibhav Singh, co-founder of Leap, said that while Indian students make up roughly 25% of a class in a number of graduate programs in the US, the loans available to them have much higher interest rates than their American peers.

“This disparity stems from systemic inefficiencies and lack of innovation. We have innovated on multiple dimensions – technology, financial structuring, and risk – to bring down the interest rate and improve customer experience,“ he added.

Singh established Leap in 2019 alongside fellow Indian Institute of Technology Kharagpur graduate Arnav Kumar, who between them have worked for companies such as InCred, CapitalFloat, Zoomo, and SAIF Partners.

Currently operating with a 25-member strong team, Leap said it is currently in an aggressive hiring phase, looking to fill technology positions in Bangalore and capital markets roles in San Francisco.