Tomas Campos and Tushar Vaish co-founded Spinwheel in 2019 after Campos saw how student loan debt affected his sister, who graduated from college over ten years ago, and his niece, who graduated in 2019. .
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“When she graduated we thought it was a big step, but she was upset about how she would pay off her student loan debt,” Campos told Crunchbase News. “My sister, who worked for the government, was turned down for a student loan forgiveness and had to take all of her savings and spend them on student debt. She had saved up for a house.
It is this financial shock that Spinwheel tries to help avoid. It raised $ 11 million in its first round of funding to help Americans get out of debt faster by providing an application programming interface to integrate loan management tools into the apps people use the most.
The financing was led by QED Investors with participation from Core Innovation Capital, Fika Ventures and Firebolt Ventures.
Arjan Schütte, founder and managing partner of Core Innovation Capital, said his company invests in fintech companies and is particularly interested in student debt.
After reviewing over 100 apps in this space, Core speculated that there must be a student loan debt payment as a service. They found this in Spinwheel, he says.
“If you do it just straight away you won’t get traction, but if you integrate it into existing channels, such as banks, grocery outlets, or airline outlets, it will be more successful. “, added Schütte. “Financial services are complicated, and Tomas and Tushar have an extraordinary motivation to get up in the morning. We were moved by what we thought was an authentic story and a reason to reduce student debt. “
Spinwheel begins with student loan debt, for which the Federal Reserve estimates that $ 1.7 trillion in US student loan debt is owed. Students, on average, graduate with $ 29,000 in private and federal loan debt and default on their loans at a 15% rate.
The new funding will be used to evolve the company’s product roadmap and double its team of six people over the next six months. It will also allow the business to quickly expand into other categories of debt, such as credit cards, cars and mortgages, over the next 12 months, Campos said.
“We see ourselves as the modern API infrastructure to help Americans understand, manage and pay off their debt,” he said. “We want to start with student debt with people and grow with them as they make big purchases throughout their lives. “
Its clients include loan service providers, benefits, points and cash back providers, as well as fintechs and banks looking to add these tools to their tech stack. Customers can use Spinwheel’s low-code or no-code API and be up and running in under an hour.
While there are a number of fintech startups dealing with the student loan space, Campos believes Spinwheel’s differentiator is its holistic approach to the entire industry rather than focusing on one aspect, such as point solutions, payments or data.
“We have found pent-up demand in the market, especially because processing student loan data is the most complex part,” Campos added. “When we thought about the use cases, we knew we had to put them all together. Our approach is to deliver data, information and payments in a single integration.
Illustration: Li-Anne Dias
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