Why We Invested: FutureFuel
Student debt has reached a crisis level. Recent estimates show there are 44 million borrowers in the US owing a total of $1.6 trillion in student loan debt, with those figures continuing to grow. The average student in the class of 2016 has $37,172 in student loan debt from 4 to 6 different loans. Beyond those staggering numbers, the student loan industry can be opaque and difficult to navigate, especially for inexperienced borrowers. Meanwhile, employers’ benefits packages skew towards savings and retirement instead of the more pressing issue for many of their employees — debt management and reduction.
To tackle these problems, FutureFuel.io has developed a platform and suite of services enabling employees to reduce the effective cost of their student debt. The multi-faceted platform includes:
- Roll Up — enabling borrowers to view all their loans and payment schedules in one place. By consolidating loan information in the same place, borrowers can better manage their existing student loans
- Repay — giving employers a platform to contribute directly to the repayment of their employees’ student loan debt
- Refinancing — offering a marketplace where borrowers can find the best deals to refinance their existing loans
- Round Up — providing a tool to accelerate the repayment of student debt by rounding up spare change from transactions to put toward paying down debt
- Read — educating borrowers on how to best manage their student debt
Why We Invested
Student debt poses a major challenge for an entire generation, and we believe FutureFuel.io has high potential to make an impact for several reasons. First, the team — led by Founder and CEO Laurel Taylor — has proven their ability to hustle and learn from the market, adjusting their strategy accordingly. They have strengthened their team by adding a deeply experienced financial services executive to their board. Second, FutureFuel has gained early traction with employer customers and partners including Colonial Life, First Data, and Student Choice. In initial pilots, 60% of employees have refinanced via the platform. Third, the breadth of FutureFuel’s product offerings enables them to upsell within employers and provides an array of tools to combat student debt.
FutureFuel’s platform gives employees the opportunity to dramatically reduce the overall cost of their student debt. Through refinancing alone, it is estimated that FutureFuel users can save $19,000 and reduce their interest by 1.7%. Employer contributions through Repay and accelerated repayments through Round Up also give employees the chance to more quickly eliminate their debt, while additional resources like Roll Up makes organizing and managing loans easier. Finally, FutureFuel gives employers a platform to align their benefits packages to better meet the needs of their employees.
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