Payitoff, which builds infrastructure to automate and optimise debt management, has secured $8.5m in its seed round.
Lightspeed Venture Partners served as the lead investor, with commitments also coming from Sound Ventures, Struck Capital and Social Leverage. Several unnamed angel investors also contributed capital to the round.
With the funds, the FinTech company hopes it can capitalise on the rising demand from financial services providers as they prepare for the resumption of student loan payments in February 2022.
Capital will also be used to hire staff for its engineering, sales, customer success and operations teams.
Payitoff has designed API and low-code solutions that can be implemented within minutes and enables a user to embed student loan repayments immediately. It claims its technology helps save borrowes and average of $2,800 per year.
Lightspeed Venture Partners partner Justin Overdorff said, “With loan forbearance coming to an end and 43 million borrowers re-entering payment, we’re about to experience a ‘Student Debt Tsunami’ that will impact our economy and financial markets in ways never experienced before.
“Payitoff offers financial services an innovative solution, one that takes into account the financial health of their customer, the borrower.”
Speaking on the deal, Sound Ventures co-founder and partner Ashton Kutcher said, “We’re pleased to have the opportunity to invest in a company that is tackling a critical problem at such an unprecedented time for our economy.
“Now, more than ever before, financial services companies need the ability to offer reliable debt solutions that produce better financial outcomes for their customers, and Payitoff’s technology is uniquely suited to do just that.”
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