Leap Finance, the student lending arm of Indian edtech startup Leap, on Wednesday, said it has raised $100 million in debt from HSBC under its ASEAN Growth Fund.
Leap Finance will use the funds to extend its services to more US states, expand university partnerships and deepen its presence in India, which is its primary market.
The company’s funding comes at a time when the study-abroad market faces growing uncertainty. While the sector experienced a strong recovery post-COVID, 2024 saw fresh challenges for students seeking international education.
Founded in 2019 by IIT-Kharagpur batchmates Vaibhav Singh and Arnav Kumar, Leap runs programmes including LeapScholar, LeapFinance, GeeBee and Yocket, which offer a suite of products catering to overseas education.
Leap Finance offers education loans to students pursuing a postgraduate degree abroad. Leap Finance offers a collateral-free, USD-denominated loan product that covers the entire cost of international study.
Leap Finance’s funding comes a month after its parent Leap raised $65 million in Series E equity raise led by Apis Partners. Leap has now raised over $400 million in equity and debt since inception.
Regulatory changes in key destinations like Canada, Australia, the US, and the UK have significantly impacted international student enrollments. Canada’s plan to cap student visas could lead to a 35% decline in international enrollments over the next two years, while Australia has increased financial requirements for visas and restricted geographic mobility for graduates seeking post-study work opportunities, according to a report by Redseer Consulting.
Meanwhile, Indian students in the US have faced increasing challenges in securing jobs post graduation, adding another layer of complexity for those considering overseas education.
In a response to DealStreetAsia, Leap’s co-founder Vaibhav Singh admitted that despite the headwinds due to the job opportunities, the US remains one of the biggest destinations.
“Despite regulatory challenges and market shifts in destinations like Canada, we remain optimistic. We’re adapting by expanding partnerships, expanding to different countries, enhancing student support, and making our products better, to make sure students find their best match for a great career,” Kumar had said in January.
Having deployed over $400 million out of its $1-billion ASEAN Growth Fund, HSBC is looking to double down on debt financing for new economy businesses across Asia as the region is expected to emerge from a prolonged funding winter, its regional head David Harrity told DealStreetAsia in a recent interview.
