Student debt solutions provider Spinwheel secured $11m in its first round of financing led by QED Investors with the aim to help Americans get out of debt sooner.
Core Innovation Capital, Fika Ventures and Firebolt Ventures too participated in the round.
Spinwheel plans to use its funding to accelerate sales, marketing and new product development that will expand its offering to launching features such as credit card, auto and mortgage over the next 12 months.
Founded by Tomas Campos and Tushar Vaish in 2019, the loan infrastructure startup embeds the application, payment and management of loans into the apps people use the most. By increasing access, choice and transparency, Spinwheel aims to improve outcomes and shorten the debt lifecycle for borrowers. When partnering with loyalty, payment, benefits, lending and banking businesses, Spinwheel’s APIs powers their partners’ lending and student debt management.
Indeed, the market is ripe for innovation as the student debt crisis has reached record highs in 2021. Currently, the Federal Reserve estimates 45 million borrowers collectively owe $1.71tn. Furthermore, for nearly 70% of graduates entering the workforce, holding student debt is a significant source of stress.
With student loan debt now the second-highest consumer debt category, second only to mortgage debt, there has never been a more important time for startups to launch tech tools to remove the barriers preventing other institutions from supporting those with these loans, Campos said.
Commenting on the funding, Campos added, “Student debt is a huge source of strain in this country, and we believe that applying technology to democratise intelligent debt solutions can help alleviate this burden and change the trajectory of peoples’ lives.
“A number of employers, financial institutions and others are starting to see this too and are increasingly motivated to offer holistic financial solutions that include student debt. We want to make it as easy as possible for apps and services to support people in getting out of debt, so we’ve built the core infrastructure developers need to embed student loan solutions. Together, we can empower borrowers to understand, plan, monitor, optimize, pay, refinance and actually get out of debt.”
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