Social Finance Inc., a San Francisco, CA-based provider of an innovative lending solution that gives students access to lower loan rates than Federal Direct and PLUS loans, has raised $77.2m in Series B funding.
The round was led by Baseline Ventures, with participation from DCM and Chinese social networking site Renren Inc. (NYSE: RENN).
The company intends to use the funding to grow its alumni investor base and reach new student and graduate borrowers as it expands beyond 78 schools this fall. The lending program is currently available in 78 schools ranging from large universities such as Stanford and University of Michigan to smaller colleges such as Smith and Swarthmore.
Led by Mike Cagney, CEO, f Social Finance has created a new market that gives students alternatives to fund their education while strengthening ties to their alumni community.The SoFi program works as a dedicated lending fund that offers students a better fixed loan rate than Federal Direct and PLUS loans.
At the same time, it enables alumni to connect with their alma mater and fosters interaction between students and alumni through a social platform that combines on-line and off-line connections that facilitate financial literacy, career mentoring and in-school project assistance – helping to reduce lending rates and lower loss rates for students. To date, SoFi has generated more than $60 million in loan applications and is on a path to commit more than $200 million in student loans in 2012.