Frisco Student Loan Startup Meritize Gets New Funding, Aims to Change How Access is Provided » Dallas Innovates
Meritize is looking to capture continued growth after a pandemic-related downturn. With new funding from the impact investing arm of Aegon Asset Management, the Frisco-based funding solutions provider for education and workforce development plans to “accelerate its momentum” to help train and place workers in a variety of industries.
“A job I previously held as a loan officer for student loans opened my eyes to the fact that education funding really wasn’t a student loan – it was a family loan. “, Chris Keaveney, CEO of Meritize, told Dallas Innovates. “And the loans were really given to prime and super-prime co-signers. It was the first time I really had access to data that explicitly showed the access issues it was creating. There were countless people who were unable to get the financing they needed.
A new way to approach credit
Meritize offers an alternative to the traditional way of using a student’s credit as a means of obtaining an education loan. Its platform looks at a person’s “potential for success” when granting loans, based on things like their education and military history and the likelihood of completing a program and repaying the loan.
Instead of focusing on four-year degree-granting universities, the company works with a partner network of approximately 600 skill-based institutions and programs, spanning industries from technology to aviation, to help people find the right one.
“We are finding areas of the labor market where we really believe there is an imbalance between the demand for certain skills and the supply for those skills,” Keaveney said. “Then we’re going to find training programs that do a good job of giving people the skills to do those jobs.”
Meritize plans to double its revenue year over year
Since its launch in 2017, the company says it has helped nearly 20,000 students find financial access to education, lending around $250 million during that time. Meritize has since grown its workforce to 65 employees, 15 of whom were hired this year.
While the company has continued to grow since its inception, Keaveney said Meritize faced some hurdles as it followed the Department of Education in suspending the collection of interest on loans. Meritize issued about $60 million in new loans last year.
This year, Meritize expects the number of creations more than doublewhile seeing its year-over-year revenue also double, according to the Dallas Business Journal.
Changing the way of providing access to education
Although the company did not disclose the amount of its new funding, Keaveney said it plans to use it to capitalize on Meritize’s renewed growth. The company plans to increase its workforce by approximately 30%, focusing primarily on the development side of the business, which will allow it to develop its technology and expand its partnerships. It will also seek to work with businesses to improve the skills of their existing workforce.
“We are going to see a restructuring and a dislocation of the labor market. And when that happens, you have a lot of people who then have to start thinking about what’s next for them. In many cases, that next step is learning new skills,” Keaveney said. “My goal for Meritize is to create a set of products and a process where people looking to learn new skills can be matched with schools and training programs that can provide those skills, as well as employers who need these skills. By doing this, we believe we can create benefits for all three parties.
In addition to the new funding, James Rich, Founder and Lead Portfolio Manager of Aegon’s Sustainable Fixed Income and Impact Risk Credit Strategies, will join Meritize’s Board of Directors as an observer. Aegon, which has $432 billion in assets under advisement, joins other investors including College Loan Corp., Colchis Capital and Chicago Ventures, which have already funded Meritize with around $20 million, ahead of the most recent announcement. recent.
“We really wanted to change the way people thought about access to education. The idea of someone wanting to get training or education in a certain field to get a job that interests them and how you determine if they qualify for that funding is to look at the credit is simply perverse,” Keaveney said. “Our real mission is to get to the point where we can show that there are better ways of doing this that create access – where access is earned and has been earned in a dimension that is not tied to the credit.”
Join the list.
Dallas innovates, every day.
Sign up to keep an eye on what’s new and coming to Dallas-Fort Worth, every day.