Why We Invested in Eduvanz

Dave Richards & Kate Loose on

April 22, 2022

Eduvanz enables access to better-paying jobs through zero-interest education loans

Eduvanz is the #1 provider of zero interest loans for education and skills training to the aspiring middle class in India.

Would-be students and education institutions today face an interconnected challenge. To get a better paying job in India requires additional skill development which can be prohibitively expensive. The best education institutes struggle to keep tuition fees low while also filling their classrooms and covering their operating costs.

The Eduvanz team set out to address the challenge of both giving students an affordable path to finance a skill-to-better-job investment while filling up the classroom seats for respected education institutes.

Why we invested in Eduvanz

 

1. Proven product-market fit – The profitable business model aligns the interests of students and institutes with success. Eduvanz provides a discounted loan to students where the discount is financed directly by the educational institute. The student is responsible for repaying the full face amount of the loan directly to Eduvanz, while Eduvanz benefits from recovering its principal along with the discounted amount. This model enables Eduvanz to provide zero interest loans to students while ensuring institutes have a stake in the student’s success.

2. Proprietary technology – Effectively leveraging technology enables Eduvanz to operate with high efficiency vs. traditional lending businesses. Eduvanz has zero “feet on the street” and it takes less than 8 minutes from application to loan disbursement for qualified students due to Eduvanz’ mobile platform, alternative credit assessments, and back-end tech stack.

3. Large market opportunity with low competition – There isn’t much formal competition as most lenders focus on financing overseas education and most students revert to informal networks. If only banks would finance these “student loans”, but alas, banks (and other loan agencies) in India are nervous about the collections from education related loans so they are reluctant to offer these loans or only to offer them at high interest rates. Vocational lending is a large $5B white space that Eduvanz is in a clear position to lead.

4. Strong partners and external validation – Eduvanz has won the respect of multiple blue chip on-lending capital providers with reasonable rates reflecting confidence in Eduvanz’ underwriting and operational model.

5. Positive impact – Eduvanz is filling a financing gap and directly addressing aspiring middle-class needs, as 45% of Eduvanz loans are to students from lower-income families (with monthly household income of less than US$500) and 64% of the Eduvanz’s borrowers come from Tier 2 and 3 cities. Furthermore, 21% of borrowers are taking a formal loan for the first time, in the process, taking their first step to building a reliable credit history.

6. Founder’s experience and agility – The Eduvanz founders, and now broader leadership team, continue to be learners as well as professional operators, using capital efficiently and building an enduring and scalable business to support 10,000’s of better-job-seekers on their journey to the middle class.

Capria Ventures invested in Eduvanz Series B after meeting founders Varun Chopra and Raheel Shah via our relationship with India early-stage VC investing partner, Unitus Ventures. Unitus led the first institutional seed round in 2019 and supported the team through their early period of further developing their model, products, institution relationships and their product-market fit. Unitus was joined by Sequoia India which led the Series A funding round in 2020.

Dave Richards is the lead partner for Capria investing in India. He works closely with Kate Loose who leads India investments and Aparna Jindal who led the investment process for Capria’s investment in Eduvanz.

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