StepEx, an FCA-regulated FinTech startup that provides affordable student finance based on future earnings rather than debt, has raised €1.2m in pre-seed funding.
This round, which follows an earlier angel investment of around €314.8K, was backed by BBVA Anthemis Venture Partnership, Triple Point Ventures and prominent angel investors – including renowned investor Chris Adelsbach.
The money will primarily fund further development of the company’s machine learning model and user platform, as well as expansion of the senior team.
Founded in 2017 by Daniel George, StepEx is currently focused on postgraduate university education and technical skills courses. The company intends to expand the range of providers that it works to scale the impact of Future Earnings Agreements to all who need them.
A meagre 2% of the population can afford to take on the cost of pursuing a top postgraduate qualification in the UK. StepEx aims to widen participation among the other 98% by providing finance based on projected future earnings, enabling them to access otherwise out-of-reach courses that significantly enhance their economic prospects.
Through StepEx’s Future Earnings Agreements, students pay a percentage of their earnings for a fixed period. This is only triggered upon completion of their course when they cross an agreed salary threshold based on StepEx’s forecast of their expected earnings. StepEx charges course providers an up-front fee per student and takes a small commission on each monthly repayment.
Already working with top business schools in the world – London Business School, universities of Cambridge, Cranfield Uni and INSEAD – as well as several providers of courses focused on in-demand technical skills such as coding and AI, StepEx has built a dataset of graduate earnings. By pairing this with Open Banking data and a machine learning model, StepEx is able to reliably predict and verify an applicant’s future earnings. In the future, the company will also be able to give course providers meaningful, data-driven feedback about pricing and the value courses are delivering.
Cranfield University director of the Bettany Centre Stephanie Hussels said, “The looming debt that faces students when they complete business school degrees effectively roadblocks people from reaching the career destination their talent promises.
“For Cranfield, Future Earnings Agreements will widen our student base, opening the opportunity of the very best that postgraduate education offers to people irrespective of income and social background. The benefits will ultimately be felt by organisations chasing talent from a broader spectrum – and by the economy, as more people realise the full potential of their abilities.”
Highlighting the importance of student finance, George said, “Using outcome-based finance to expand access to postgraduate business degrees and professional or technical qualifications could increase. But that doesn’t account for a whole host of other qualifications that could unlock new, higher-earning opportunities for people in what used to be called ‘blue collar’ occupations. The Future Earnings Agreement model works just as well for an Amazon warehouse worker who wants to earn more money as a truck driver, but can’t afford the training, as it does for a freelance designer wanting to develop coding skills or an entrepreneur currently priced out of an MBA.”
George added that by unlocking economic opportunities, “we’re not just helping individuals earn more, but also boosting the nation’s productivity and tax receipts.”
Commenting on the round, BBVA & Anthemis’ Venture Partnership head Christhi Theiss said, “StepEx has created a solution that benefits students and educational institutions in equal measure. But it’s also an attractive investment for lenders – combining strong returns with genuine social impact. We have every confidence in the team’s ability to make this a mainstream option that transforms student finance.”
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