peerTransfer, a simple payment solution designed for international students, today announced that it has closed a $7.5 million series A financing round. The investment was led by Spark Capital, with participation from Accel Partners, Maveron, and Boston Seed Capital.
The new infusion of capital adds to the $1.1 million in seed funding the startup raised back in October of last year, bringing total investment to just north of $8.6 million. The startup plans to use its recent round to increase hiring and development of its infrastructure, as it continues to partner with colleges and universities across the country to simplify international education payments.
Founded in 2009, peerTransfer targets international students in attempt to provide them with a simple and secure payment method to quickly and securely make tuition (and other education-related) payments. The startup aims to save international students money by eliminating high transfer fees and by offering discounted exchange rates. The value proposition for educational institutions, on the other hand, is that peerTransfer’s solution captures student ID info at the time of payment so that schools know that the full payment has been received and contains the necessary info to post immediately to student accounts.
The startup is currently working with 30 institutions, including Auburn University, Georgia State University, Miami University, Reed College, Wellesley College and Western Kentucky University in an effort to streamline international payment processing, while giving students some peace of mind and an opportunity to save thousands of dollars over the course of their education.
The best part is that peerTransfer is free of charge for educational institutions and requires no engineering or coding knowledge to implement the solution for institutions. As international students in the U.S. lose more than $1 billion per year from bad currency exchange rates and banking fees, according to peerTransfer Founder and CEO Iker Marcaide, the startup is looking to bundle transactions to secure higher-volume purchases and to take advantage of more favorable exchange rates.
The startup’s workaround involves eliminating intermediary transaction fees in order to save students money and, at the same time, works to reduce administrative overhead by ensuring accurate delivery and posting of funds to student accounts.
It’s an innovative, if not slightly risky business model: In that the company doesn’t charge students or schools any money for its service, and instead shares in the savings generated by students thanks to its ability to take advantage of more favorable currency exchange rates.
Music to the ears of international students to be sure. For more on peerTransfer, visit them at home here.
Or check out the video below: