FTT+ Expert Charley Ma On the Future of Fintech and Student Lending
Hi everyone, Charley here.
New topic for me today, but one that we’re all very familiar with: student debt (yes, I’m on a lending kick the past month, don’t @ me). The pandemic has had a profound effect on the financial services industry, and one area that investors are now taking a closer look at again is student lending. I wanted to spend some time investigating what’s happening as well as where some investors are starting to deploy capital back in again.
Fintech Today With Launch House
Founding a company during a pandemic can be a lonely endeavor. Enter Launch House, an exclusive community of 300+ founders that offers fundraising support, and partnerships with top creators that can make going from 0-1 easier than ever before.
They have a one month residency beginning Nov 28th in LA with < 20 spots for the brightest Founders.
The community members will be living together in a, direct quote from the team, “super dope” 3,000 sq foot Beverly Hills mansion. While there, residents will be meeting with heavyweights of the fintech community, learning from their fellow founders, and building their companies all at the same time. Beyond the first month, you gain continued access to the highly engaged community and network of investors/creators. Members who have gone through the program have raised millions from top-tier VCs like a16z and Sequoia.
To apply for the upcoming cohort, click here.
CARES Act Ending
Back in March of 2020 as part of the CARES act, the US Department of Education temporarily suspended loan payments and applied a 0% interest rate across the pandemic for loans owned by the Department of Education. The program was extended multiple times afterwards as the pandemic continued, but in less than 100 days (on Jan 31), the government will restart collecting on student loans. The Biden administration is apparently developing plans on how it’s going to restart federal student loan payments for tens of millions of Americans, but one way or another, it’s probably going to be a bit chaotic and confusing for many people.
Against this whole background, student debt exposure continues to grow in the United States. All of us have family members, friends or are personally trying to navigate through the maze of regulation, repayment schedules, minimum payments, interest rates, alphabet soup agencies, etc. College students today, on average, graduate with $29k of private and federal loan debt and default on their loans at a rate of 15%. Meanwhile, overall US consumer debt continues to increase, with an average American holding an overall debt burden of $92k. Over the past year, student loans saw the largest growth in average balances at nearly 9%, followed by average auto loan debt and mortgage debt.
The freeze (for better or for worse) effectively wiped out the business model for a lot of companies in the student lending space. To further add to the chaos, several student loan servicers decided to exit the federal servicing business (Navient, PHEAA, Granite State, and UHEAA). However, with the freeze being lifted, $1.7T of payments will need to be managed, serviced, and collected. Thus, the timing seems right for a new crop of companies to emerge. We’ve seen established players like SoFi add on other products (and heck, even companies) in order to diversify. We’ve also seen new business models emerge, such as Commonbond creating a B2B offering for companies to contribute to student loans as a corporate benefit or Acorns acquiring Pillar to help its consumers manage student loan debt.
A New Cohort
We’re also starting to see the next wave of student loan debt infrastructure start to emerge! Players in the space that are on my radar include:
- Spinwheel: Recently raised $11M led by QED with Core Innovation Capital, Fika Ventures, and Firebolt Ventures (full disclosure, I’m a small investor!)
- Payitoff: Recently announced a $8.5M seed round led by Lightspeed Venture Partners
- Rightfoot: Announced its $5M seed in Feb 2021 led by Bain Capital Ventures and joined by Boxgroup
- Plaid’s liabilities API (for those that are new here, I was one of Plaid’s early employees)
Each company has taken different approaches towards how much they build vs buy when it comes to their own internal stack. For example, Rightfoot partners with Plaid and Dwolla to provide some of its data + write capabilities while Spinwheel has built its own data integrations into debt servicers - and even provides fully white-labeled “smart” experiences for calculating refinancing payments on the fly that its customers can pull off the shelf. Payitoff has also built out its own integrations and provides access to payment capabilities + repayment enrollment programs.
In my opinion, the key comes down to coverage + data accuracy and then secondarily, the additional features built on top of that data for different types of companies. As embedded fintech becomes more “mainstream,” the thesis is that more and more companies will want to offer products that help consumers solve main stresses in life + increase product stickiness - and student debt is a super fascinating place to start. I expect there to be more updates over the next few months on how the administration plans on restarting student debt payments and it’ll be interesting to see how companies respond to regulation in real time.
Charley Ma is currently GM of Fintech at Alloy, where he focuses on the go-to-market strategy for the fintech vertical. Prior to Alloy, he was head of growth at Ramp. Previously, he was the first growth hire at Plaid, where he started its fintech sales team and opened the NYC office prior to the announced exit to Visa for $5.3B. Charley is also an active angel investor in fintech + developer infrastructure and enjoys a good tweet.
Older messages
FTT Update: Taylor Swift NFT
Monday, November 15, 2021
Hi all, Julie here. The first of two podcast episodes coming out this month with a focus on international markets. Huge thanks to Kiaan Pillay of Stitch for coming on and talking about fintech
FTT+: The Big Interviews You Might Have Missed
Sunday, November 14, 2021
Hi all, Julie here. Going to do a little shameless self promotion here, so bear with me. Early in 2021, Josh Kaplan from Morning Brew (and now founder of SmoothOps) started doing some consulting
FTT Update: Miami Mayor Tells NYC Mayor to Hold His Beer
Friday, November 12, 2021
Hi all, Julie here. It's Friday again! And there are only 7 of them left in 2021. Still plenty of time for fintech news and billion dollar Series A rounds. Also plenty of time for more podcasts
FTT+: Christmas.eth Came Early This Year
Thursday, November 11, 2021
Hey everyone, Jordan here. Over the past 5-6 months, many of you avid Twitter users have probably noticed more and more people with a .eth address in their display name. I did too and fortunately,
FTT Update: The Next Big Token
Wednesday, November 10, 2021
Hi all, Julie here. I know a number of you took part in NFT NYC recently. If that was you, or you have no idea what I'm talking about, you should check out Parker's recap of it for us on
You Might Also Like
👋 Bye bye, bitcoin
Thursday, February 27, 2025
Bitcoin's biggest one-day blow, Trump's latest tariff threat, and robots playing soccer | Finimize TOGETHER WITH Hi Reader, here's what you need to know for February 28th in 3:12 minutes.
Don't Overlook this Sector Billionaires are Quietly Investing In
Thursday, February 27, 2025
The Billionaires' Energy Secret (You Can Get In) ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Giveaway: Set Sail on Your Next Adventure 🚢
Thursday, February 27, 2025
Enter to win a chance to win a free trip from Virgin Voyages. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
🤖 OpenAI's ex is doing just fine
Thursday, February 27, 2025
Intel looks to be falling apart, a humanoid company 15-timesed its valuation in one year, and what the DeepSeek shakeup actually means | Finimize TOGETHER WITH Hi Reader, here's what you need to
"Impoundment," explained
Thursday, February 27, 2025
Congress's power of the purse vs. presidential power View this email online Planet Money A Constitutional Conflict Over “Impoundment” by Greg Rosalsky A constitutional conflict is brewing over
The New Nuclear Weapon - Issue #510
Thursday, February 27, 2025
FTW: AI is no longer just a tool—it's the new battleground for global power. The Geopolitical AI War is here. Who will push the button? ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
The Annoying Path to Privacy Herd Immunity
Thursday, February 27, 2025
Plus! Robots; Competition; Model Moderation; Eggs; Sentiment The Annoying Path to Privacy Herd Immunity By Byrne Hobart • 18 Feb 2025 View in browser View in browser In this issue: The Annoying Path to
Social Security COLA Estimates Tick Higher
Thursday, February 27, 2025
Sticky inflation could give retirees a raise ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Are you 62+ and in need of cash?
Thursday, February 27, 2025
A reverse mortgage may be just the thing ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
📉 This tech stock missed the rally
Thursday, February 27, 2025
Baidu fell further behind China's tech rally, European defense stocks bulked up, and the truth behind your sports gloop | Finimize TOGETHER WITH Hi Reader, here's what you need to know for