The student loan crisis has always been a hot topic and it’s estimated that student loans collectively totals at a whopping $1.4 trillion dollars. The risings cost of education are making students question the return they will receive from their educational endeavors. Climb Credit believes there is a way to solve this dilemma. The startup founded in 2014 helps students pay and select career-relevant training schools that prepare students for in-demand jobs with high earning potential. Climb has partnered with over 140 vocational schools and these schools are laser-focused on providing a faster and more affordable way to help people kick start their career or transition into a new one. Climb Credit has provided over $100M in loans to more than 11,000 students. With a focus on outcomes from education, Climb graduates have been able to earn on average 67% more once out of their programs.
AlleyWatch spoke with CEO Angela Ceresnie about Climb Credit’s mission, future plans, and its latest round of funding, which brings its equity funding to $15.8M. The company closed a debt facility to be used for lending from Goldman Sachs for $50M earlier this year.
Who were your investors and how much did you raise?
Climb Credit raised $9.8M in Series A financing led by Third Prime and New Markets Venture Partners with participation from Acumen, Impact Engine, Two Culture Capital, and Elizabeth Tse, alongside existing investors including 1/0 Capital, Learn Capital, Montage Ventures, and Michael Sidgmore.
Tell us about the product or service that Climb Credit offers.
Climb is a student lending platform that addresses the $1.4 trillion student loan crisis by expanding socioeconomic opportunity for lower- and middle-income Americans. Climb does this by helping its students select and fund career-relevant training that best prepares them for in-demand jobs with high earning potential. Its partner programs offer courses in fields ranging from software engineering and data science to teaching and heavy equipment operation. To date, Climb has originated well over $100M in loans, funded the education and skills training of over 11,000 students, and partnered with more than 140 schools and next-generation post-graduate career training programs.
While I didn’t have a hand in starting Climb, my current role as CEO of the company is a product of multiple stepping stones in my career. In the past, I ran and managed risk analytics at large banks, which taught me about how the credit and lending space operates. When I later founded and began building Orchard, I learned how to deal with the ever-changing needs of a business as it continues to scale. In taking on the role of COO and eventually CEO of Climb, I was able to combine my learning and passion from both of these experiences.
I’m excited by Climb’s mission and the fact that we are tackling more complex and relevant issues as we continue to grow. It also doesn’t hurt that I get to work with an amazing team of committed and driven individuals.
How is Climb Credit different?
As most student lenders focus on providing loans to those pursuing a traditional four-year college degree, Climb caters to the underserved market of those seeking a faster and more affordable way to kick start their career or make a transition into a new one, whether they’re an upcoming high school graduate interested in coding, or a retail worker looking to make a jump into the construction industry.
What market does Climb Credit target and how big is it?
There are a number of business opportunities that we are in, including the business of career transformation, which is nearly a $250B market, career-focused education financing, which is a $95B market, and recruiting, corporate training, and retraining, which is a $148B market.
What’s your business model?
We primarily make money from origination fees charged to the students and included in their monthly payments.
What was the funding process like?
While the problem we’re solving is massive, the industry we’re serving (technical and career training schools) isn’t well known by the venture community. Both Third Prime and New Markets had an independent view of the size and potential with this market, along with our existing investors, particularly One Zero Capital, which make them great partners for us!
How has the business changed since we last spoke in 2017?
Since 2017 we’ve made some significant strides to address the student loan crisis at its root, by offering affordable financing to students while working to align graduate outcomes with university incentives. Climb now partners with 140 schools across industries from software engineering and data science to teaching and heavy equipment operation. We’ve also launched a new experience on our site that makes it easy for students to find and fund skill-based programs across multiple career paths.
What are the biggest challenges that you faced while raising capital?
Fundraising is a lot of work, and it can be a real distraction from running the day to day business. I enjoyed the process of meeting smart, thoughtful investors but also was excited to get back to the team and executing against our lofty goals.
What factors about your business led your investors to write the check?
Our investors wrote the check because of our outcomes-centric approach to evaluating the career training programs that we offer students and the large, underserved market we’re addressing. Our programs are proven to show a much higher ROI than traditional colleges, with the average Climb graduate experiencing a 67% increase in their salary.
Our programs are proven to show a much higher ROI than traditional colleges, with the average Climb graduate experiencing a 67% increase in their salary.
In general, the process of identifying and selecting education programs is a difficult one for prospective students to tackle on their own. Through using our platform, students have full visibility into what their top choices look like, ensuring that their decision best aligns with their long-term financial and career goals.
What are the milestones you plan to achieve in the next six months?
With our new round of funding, we plan on expanding our current product suite to help more people access skills-based education programs and increase their earning potential post-graduation. On this new platform, students will be able to explore and compare high-quality career and technical schools, all of which have been verified through our specialized return-on-investment calculation, which takes into account factors such as program cost, time to completion, job placement, and salary growth over time.
Additionally, we plan on rolling out a new outcomes-based loan offer over the next year, which will include a tuition payment option that provides the student benefits of an ISA while holding the consumer protections of a loan.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
If fundraising is in your future, be thoughtful about how you sequence your investor meetings. Start with the investors that are most friendly and can give you feedback. Also, remember that almost everyone who raises money hears a lot of “no’s”, so don’t let it discourage you! If you believe in your idea, keep it up!
What’s your favorite restaurant in the city?
I have two – Via Carota in Manhattan and Bar Tabac in Brooklyn (my neighborhood spot!).