CommonBond passes $1B in financing, announces acquisition

Online lender for student loans CommonBond made a couple of moves this week which position it well for future growth.

They have secured more than $300 million in new funding for a combination of equity and lending capital. Led by Neuberger Berman Private Equity, the round also included existing institutional investors August Capital, Tribeca Venture Partners, Social Capital, Nyca Partners, and Victory Park Capital along with Vikram Pandit, former Thomson Reuters CEO Tom Glocer, and former Barclays Private Wealth CEO Tom Kalaris.

The equity funding will be allocated toward hiring, technology, and scaling of loan operations and brings the total combined equity and debt financing to beyond $1 billion. The exact amount of equity funding was undisclosed.

Neuberger Berman managing director Brien Smith shared why he’s betting on CommonBond.

“Among the hundreds of fintech lenders out there, CommonBond stood out to us for its sophistication in underwriting, capital markets, technology, and customer acquisition. It’s still early days in online lending’s disruption of traditional finance, and we believe CommonBond, with its world-class team and history of consistent performance, will continue to be a leader in the space for years to come.”

An undisclosed global asset management firm purchased $300 million in CommonBond loans.

CommonBond also acquired Gradible, a personal finance platform which provides users with personalized recommendation on how to better manage and repay their student loans. Gradible was founded in 2013 by Pete Wylie, Grant Biles and Lee Smallwood. Mr. Wylie and Mr. Biles join CommonBond in the respective areas of core finance and UX design. Read a Bankless Times profile on Gradible here.

The acquisition allows CommonBond to offer employers a full suite of student loan refinancing options in addition to student loan refinancing. Now included are a comprehensive suite of tools to manage and save on student loans and corporate direct contribution options to employees’ student loan debt. Even though only four percent of companies now offer such an option, that figure is expected to exceed 25 percent in two years as millennials clamor for the incentive.

CEO and cofounder David Klein said CommonBond differentiates itself in the employer program through being comprehensive.

“We are proud to be the first company in America to provide employers with the three most critical benefits on one tool, student loan assessment, refinancing, and contribution programs.