A startup called SelfScore has raised $7.1 million in new venture funding to help bring much-needed financial services to international students at U.S. colleges and universities.
SelfScore co-founder and CEO Kalpesh Kapadia grew up in India, but moved to the U.S. for graduate school in 1995. That’s when he first noticed the challenges of assimilating into what he says is the credit-based economy of the U.S., even for students with the best grades and highest degree of responsibility.
“The system has been designed around things like credit scores from FICO which came into existence before the smartphone, the internet and social media. And if you move here of course you will not have a ready made credit history.”
According to SelfScore’s market analysis, the 1.1 million international students in the U.S. are responsible for some $31 billion in annual spending, including tuition of course.
SelfScore advertises as the International Student’s MasterCard, and largely that’s what it is today.
Here’s how the company is distinct from other banks and credit card providers serving foreign students, Kapadia said, “We measure a borrower’s credit potential instead of their history….We also help them build a credit score through credit education.”
The company uses data that’s standard in the financial services world to determine whether a student should get access to a SelfScore credit card in the first place.
Students provide SelfScore with passport or visa info, to show they have a right to be studying in the U.S., and evidence that they are enrolled in school, as well as their e-mail, phone number and physical address.
But once the company has given borrowers access to a credit card, SelfScore uses machine learning, and data from Facebook and LinkedIn to understand when they are going through major life changes that could impact their finances.
Graduating from a prestigious school makes users look like a good credit risk, but contrastingly, changing from a full-time job to looking for work, or changing from married to divorce could mean someone is more of a credit risk, and more in need of credit-related education.
Pelion Venture Partners led the new investment in SelfScore joined by Accel Partners and Aspect Ventures. The funding is classified as a Series A extension, and brings the company’s total equity funding raised to about $14.5 million.
With his firm’s investment, Blake Modersitzki, managing partner at Pelion Venture Partners, has joined the board of SelfScore.
Kapadia said while the company only offers one major card to students now, it will use the new Series A funding for hiring, marketing and to roll out tiered levels of service from gold to platinum credit cards in the next year or two.