Thrivent Invests in College Ave Student Loans
WILMINGTON- College Avenue Student Loansa major fintech lender for private student loans, has a new majority shareholder after Fortune 500 company Thrivent acquired shares from previous investors.
The addition of prosperousa Minneapolis-based diversified financial services company with $10 billion in revenue last year, is a growth boost for 7-year-old College Ave.
The start was spear by two former Sallie Mae and MBNA executives, Joe DePaulo and Tim Staley, who saw an opportunity to use simplistic online applications for private college loans after the share of competitors fell dramatically following the Great Recession. It also offers lower interest rates than competitors and allows student loan refinancing, a unique feature in the industry.
Today, College Ave is a top brand in space and the third largest school lender, originating and servicing over $1 billion in student loans annually.
Although the value of Thrivent’s investment in College Ave was not disclosed in the Sept. 12 announcement, College Ave called it a “significant commitment.” The company told the Delaware Business Times that its executives did not sell their shares as part of the July 21 deal.
“It was a natural evolution given College Ave’s growth and accomplishments to take advantage of the opportunity to engage with a strong and strategically aligned partner in Thrivent,” the company told DBT in a statement regarding its new majority shareholder.
College Ave’s leadership, branding and strategy will remain the same after the investment, officials said. That includes loan securitization, which the company has done four times to date, most recently in February when it secured $385 million. College Ave securities received top ratings from rating agencies, attracting a total of 56 institutional investors, including some of the world’s largest asset managers.
The company will retain its headquarters in an office on North King Street in Wilmington and will continue to add employees as its business grows. Today, it employs around 75 people.
College Ave had raised $60 million in previous venture and seed funding rounds from investors including Comcast Ventures, the cable giant’s investment arm; Fenway Summer, a DC-based venture capital firm; DW Partners, a New York hedge fund; Leading Edge Ventures, a Newark-based early stage investment firm led by well-known local entrepreneurs; and Albert Lord, the former CEO of Sallie Mae who brought the student loan giant to Delaware.
It’s unclear how many of College Ave’s prior investors, if any, remain involved in the private company following Thrivent’s stock acquisition. Officials did not respond to a question from DBT about their involvement, saying only that company executives were holding onto their shares.
In 2019, College Ave also secured debt financing worth up to $65 million from Maryland-based investment firm Guggenheim Investments, which would allow it to borrow money to fund a future expansion.
Thrivent’s investment in College Ave will allow the company “to explore faster growth and new expansion opportunities, while maintaining its promise to provide the best products for students and families,” the companies said. responsible.
“This is an ideal opportunity for College Ave as we will benefit from a strategic partnership with Thrivent and have access to capital to continue to invest and grow our business,” said DePaulo, CEO of College Ave, in a statement. “We are committed to helping students and their families make informed decisions about financing their education through responsible and competitive loans. This partnership helps us pursue our mission.
Stephen Friend, vice president of mergers and acquisitions and corporate development at Thrivent, said his company is “always looking for ways to leverage our financial strength and deliver value to our members.” .
“This formalized relationship with College Ave Student Loans is a great way for us to invest in an important asset class and partner with an organization with a strong management team, an attractive growth trajectory and… ‘a mission that aligns with our goal of helping people make the most of everything they’ve been given,’ he added in a statement.