StudentFinance nabs $41M to help Europeans upskill for in-demand jobs

StudentFinance, a European fintech that funds educational programs for individuals through so-called income share agreements, has raised €39 million ($41 million) in a Series A round of funding.

Founded out of Spain in 2019, StudentFinance partners with educational institutions such as Ironhack and Le Wagon to help finance those looking to upskill into disciplines like software development, cybersecurity, and artificial intelligence, serving as an alternative to traditional bank or student loans.

The company says that it has developed AI models to discover the most in-demand skills across sectors and map this to the most suitable education providers catering to that gap.

"We monitor and track publicly available job listing data, showing trends and fluctuations in labour demand," StudentFinance co-founder and CEO Mariano Kostelec explained to TechCrunch. "We also use data from analyzing systemic and market changes such as government incentives for companies to become 'greener.' This gives us data on future growth — or declining -- sectors."

On top of that, Kostelec also said that they track salary data, which can indicate demand for specific skills.

"We are developing machine learning models that use this data to forecast future job-market demand for specific skills, and predict income levels in the future," Kostelec continued. "This is an area we will be increasingly investing in."

Indeed, Kostelec said that they plan to use their new funding to expand their own internal data and AI capabilities through strategic hires, enabling it to better predict job market demand.

From the student's perspective, income share agreements mean that graduates only pay for their tuition when their salary hits a set threshold, after which they repay a percentage of their monthly income back to StudentFinance over a set number of installments that fluctuate based on earnings. If they never enter into employment, then they don't repay anything, though they are still liable for repayments if they get any kind of job that hits the earnings threshold, even if it's completely unrelated to their course.

On top of the interest repayments garnered from each student, StudentFinance's revenue stream includes fees that it charges course providers for each student who starts a course.