Let’s think about what a classic paid school offers to us. “Give us money, we will teach you. How so, you don’t want to pay? Look how beautiful our landing page is! What reviews were left by previous users! What is our affordability and what is the percentage of employment! Well, okay, so be it, here’s a 40% discount and an interest-free installment plan.”
Modern trendy services offer a different model, “let us teach you; thanks to the knowledge you will get a good job and pay a percentage of your salary.” The student doesn’t risk money. The school earns many times more, but it has to teach better – now it needs to employ a graduate, after all. Everyone is happy, the Income Share Agreement conquers the world.
Only old schools with the outdated system lose from it. They need to stay on the sidelines of progress or switch to a new model, and switching to it is both expensive and difficult. First, they need to exclude the upfront fee and work for six months or a year without money. Then, they need to find out who, among their graduates, has already managed to find a job and to shake money off them. And, there is no required expertise within these kinds of schools.
The American #startupoftheday Leif solves the problem. Its mission is the most seamless transition to work through ISA. In the beginning, it attracts students, pays an advance payment for them, and then knocks out the money from those who found a job. For a school, the traditional process hardly changes, everything new is done by the startup, it just makes more money.
Leif was launched in 2017 and raised $20 mln in investment and $100 mln in prepayment loans. It turns out that about 10 thousand students are now studying with its help.
#USA #roundb #Education #fintech #Credit
Translation : Valeria Stupnikova
Alexander made his career in Russian internet companies including Mail.Ru, Rambler, RBC. From 2016 to 2018 he was Chief Strategy and Analytics officer in Mail.Ru Group. In this position, he worked on M&A, investments, and new project launches. In 2018 he became Deputy CEO in Citymobil, a Russian Uber-like company that was invested by Mail.Ru Group and Sberbank (the biggest Russian bank), then he left the company to launch his own projects. Now Alexander is a co-founder of United Investors – the platform for co-investments in Russian early-stage startups. His blog #startupoftheday (#стартапдня) is one of the most popular blogs about startups in Russia.