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Tiger Global is betting that more schools are going to share future student earnings

Income-share agreements, or ISAs, are a way to bring flexibility to the often steep financial costs of higher education. The financial model allows a student to learn at zero upfront cost, and then pay any costs through a percentage of future income over time.

While the model has caught fire from a variety of trade schools and bootcamps, it’s a hard service to offer at scale. It required underwriting a risky group of people — and that costs money. Just last week, a leader in the ISA space Lambda School laid off 65 employees amid a broader restructuring.

It’s here that a startup like Blair, which graduated Y Combinator in 2019, could be of use. The startup today helps universities finance and offer income-share agreements, or ISAs, to students. The startup has two services: a capital arm (Blair Capital) for which it secured a $100 million debt facility, and a services arm (Blair Servicing) that helps manage the flow of money, which just got a new tranche of capital to expand

The company told TechCrunch that it has raised a $6.3 million round led by Tiger Global. Other investors include Rainfall and 468 Capital, along with angels such as Teachable’s Ankur Nagpal and Vouch’s Sam Hodges. The raise came on top of a $1.1 million pre-seed round, bringing Blair’s total capital raised to date at $7.4 million.

A big portion of the venture capital money will go toward doubling or tripling Blair’s San Francisco team, said CEO Mike Mahlkow. It is especially investing in engineering and product, as well as a few senior hires in finance, compliance and the service side.

The Blair founding team.

Notably, Blair’s eight person team is fully male. The lack of gender diversity, even as an early-stage startup with a handful of employees, could hurt its competitive advantage, recruiting prospects, and and performance over time. About 25 percent of the employees are LGBT and 27.5% identify as non-white.

Blair started as a tool to underwrite students with loans that would pay for college, a sum that would eventually be repaid through an income-share agreement. It was similar to an Affirm for Education, where it could help students get access with low or nonexistent upfront costs.

“The model worked very well until March last year,” Mahlkow said. “And then the debt market was fairly dead, so we needed to shift our focus to a more software-like approach.” Now, Blair focuses on building ISA-based programs for schools, and underwrites loans based on certain programs at certain schools that have historical returns.

Most companies use its servicing piece — aka an operating system for offering ISAs — but a number of companies turn to Blair to help finance the costs of offering an ISA. Either colleges and bootcamps finance the ISA themselves and put it on the balance sheet, or they sell it to a company like Blair to get the money upfront and get repaid eventually.

Blair Servicing takes a percent of money from an ISA once a student is employed post-graduation, and Blair Capital takes a base fee plus a portion for the ISA as well.

While the company did not share exact numbers, it did say it has doubled its customers since February, tripling revenue during the same time period. Of course, a bet from the ever-ravenous Tiger Global is a statement. And, unlike his new investor, Mahlkow plans to keep growth sustainable and lean. Long-term, Blair is betting that outcome-based financing could get traction in more than just a savvy startup bootcamp but in how recruiting and placement works in various industries. The startup is in talks with a sports association and large companies that are working on upskilling and reskilling their workforces. Incentives are key in edtech, and Blair speaking that language as an early-stage startup is key as the sector moves more into the spotlight.

With backers like Tiger Global, LatAm crypto exchange Bitso raises $250M at a $2.2B valuation

Bitso, a regulated crypto exchange in Latin America, announced today it has raised $250 million in a Series C round of funding that values the company at $2.2 billion.

Tiger Global and Coatue co-led the round, which also included participation from Paradigm, BOND & Valor Capital Group and existing backers QED, Pantera Capital and Kaszek.

The news caught our attention for several reasons. For one, it comes just four months after the Brazilian startup raised $62 million in a Series B round. Secondly, the company believes the funding makes it the most valuable crypto platform in Latin America. And lastly, it also makes the company one of the most highly valued fintechs in the region.

Last year was a good one for Bitso, which says it processed more than $1.2 billion in international payments — including remittances and payments between companies — during 2020 alone. Bitso says it also has surpassed 2 million users. These two milestones, the company argues, is evidence of the growing use of crypto as an everyday financial tool in the region.

Demand for crypto assets and crypto-enabled financial products have soared in popularity both for individuals and businesses in the region, according to Bitso, which aims to be “the safest, most transparent, and only regulatory compliant platform” in Latin America. The company also says it’s the only player in the region to offer crypto-insurance for its client’s funds.

“The growth of the crypto ecosystem this year has been remarkable. It took Bitso six years to get its first million clients. Now — less than 10 months later — we have reached the 2 million mark,” said Bitso co-founder and CEO Daniel Vogel. But the metrics he is most proud of are that Bitso has also more than doubled the assets on its platform in the last five months and that its transacting volume during the 2021 first quarter exceeded the transaction volume it did in all of 2020.

Bitso was founded in January 2014 and acquired its first customer in April of that year.

Bitso’s mission, put simply, is to build next-generation borderless financial services for consumers and businesses alike. “Cryptocurrencies are the future of finance and Bitso makes the future available today,” the company says.

“Bitso offers products and services for individuals and businesses to use crypto in their everyday life,” Vogel said. “In some parts of the world, crypto is associated with speculation. Bitso’s customers rely on the technology for everyday uses from receiving remittances to engaging in international commerce.”

Image Credits: Bitso

Bitso says its “global-minded” product offerings fit the needs of local customers in Mexico, Argentina and now Brazil, where it just launched its retail operations. The company plans to use its new capital toward broadening its capabilities and product offering. It also plans to expand its operations in other Latin American countries in the coming months. In January, the Financial Superintendence of Colombia announced Bitso as one of the authorized companies in its Sandbox and crypto pilot program.

Bitso’s upcoming products include a crypto derivatives platform and interest bearing accounts for crypto.

“This is a pivotal moment for the future of finance in Latin America,” Vogel told TechCrunch. “We see a significant amount of traditional financial infrastructure in the region being replaced by crypto. We plan to use this funding to continue that trend by expanding our product offering for individuals and businesses.”

Naturally, Bitso’s investors are bullish on the company’s potential.

QED Investors co-founder and managing partner Nigel Morris admits that in the past he was “a crypto denier.”

“For the longest time, we didn’t see a way crypto fit. It wasn’t clear until recently that the use cases for crypto expanded much beyond speculative trading. There are now a whole series of conventional banking products that we can wrap around it,” Morris told TechCrunch.

Bitso’s mission, he said, is to “make crypto useful” and QED believes the company is succeeding at doing just that.

“Daniel and the entire Bitso team is passionate about taking the mystique out of crypto. Crypto is not going away; it’s going to be here for the future,” Morris said. “By sitting at the intersection of crypto and traditional financial institutions, Bitso has a promise to provide lower-cost, friction-free financial services to entire populations of individuals who otherwise would be excluded — a laudable and unique mission indeed.”

Bitso, he added, is learning from the crypto experience in the U.S. and around the world.

“Not making the same mistakes and leaning into the emerging regulatory landscape has been a competitive advantage to Bitso’s success in Mexico,” Morris said. “As Bitso grows throughout the regions, they certainly have a leg up and might even leapfrog crypto adoption in the U.S.”

“Crypto is rapidly gaining adoption in Latin America,” said Tiger Global Partner Scott Shleifer, in a written statement. “We are excited to partner with Bitso and believe they have the right team and platform to increase share in this growing market.”

Founded in 2014, Bitso has more than 300 employees across 25 different countries. That compares to 116 employees last year at this time. In particular, its growth in Brazil is increasing exponentially.

“We’ve gone from 1 to 26 Bitsonauts already based in Brazil, with many more working from abroad, and plan to 3X our number of hires in Brazil by the end of the year,” Vogel said, who acknowledged that the pandemic really impacted his company via the shift to remote work. “As we expand our reach into new territories, it has become a lot easier to meet staffing needs when the requirements are based on knowledge over geography.”

Bitso’s leadership is mostly based in Mexico, but the company also has offices in Buenos Aires, São Paolo and Gibraltar.

Brazil’s Loft adds $100M to its accounts, $700M to its valuation in a single month

Nearly exactly one month ago, digital real estate platform Loft announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. The round included participation from a mix of new and existing investors such as DST, Tiger Global, Andreessen Horowitz, Fifth Wall and QED, among many others.

At the time, Loft was valued at $2.2 billion, a huge jump from its being just near unicorn territory in January 2020. The round marked one of the largest ever for a Brazilian startup.

Now, today, São Paulo-based Loft has announced an extension to that round with the closing of $100 million in additional funding that values the company at $2.9 billion. This means that the 3-year-old startup has increased its valuation by $700 million in a matter of weeks.

Baillie Gifford led the Series D-2 round, which also included participation from Tarsadia, Flight Deck, Caffeinated and others. Individuals also put money in the extension, including the founders of Better (Vishal Garg), GoPuff, Instacart, Kavak and Sweetgreen.

Loft has seen great success in its efforts to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process. 

Image courtesy of Loft

In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to co-founder and co-CEO Mate Pencz. Today, the company actively maintains more than 13,000 property listings in approximately 130 regions across São Paulo and Rio de Janeiro, partnering with more than 30,000 brokers. Not only are more people open to transacting digitally, more people are looking to buy versus rent in the country.

“We did more than 6x YoY growth with many thousands of transactions over the course of 2020,” Pencz told TechCrunch at the time of the company’s last raise. “We’re now growing into the many tens of thousands, and soon hundreds of thousands, of active listings.”

The decision to raise more capital so soon was due to a variety of factors. For one, Loft has received “overwhelming investor interest” even after “a very, very oversubscribed main round,” Pencz said.

“We have seen a continued acceleration in our market share growth, especially in São Paulo and Rio de Janeiro, the two markets we currently operate in,” he added. “We saw an opportunity to grow even faster with additional capital.”

Pencz also pointed out that Baillie Gifford has relatively large minimum check size requirements, which led to the extension being conducted at a higher price and increased the total round size “by quite a bit to be able to accommodate them.”

While the company was less forthcoming about its financials as of late, it told me last year that it had notched “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions.

The company’s revenues and GMV (gross merchandise value) “increased significantly” in 2020, according to Pencz, who declined to provide more specifics. He did say those figures are “multiples higher from where they were,” and that Loft has “a very clear horizon to profitability.”

Pencz and Florian Hagenbuch founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” The U.S. real estate tech company with the closest model to Loft’s is probably Zillow, according to Pencz.

In the United States, prospective buyers and sellers have the benefit of MLSs, which in the words of the National Association of Realtors, are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. Loft itself spent years and many dollars in creating its own such databases for the Brazilian market. Besides helping people buy and sell homes, it offers services around insurance, renovations and rentals.

In 2020, Loft also entered the mortgage business by acquiring one of the largest mortgage brokerage businesses in Brazil. The startup now ranks among the top-three mortgage originators in the country, according to Pencz. When it comes to helping people apply for mortgages, he likened Loft to U.S.-based Better.com.

This latest financing brings Loft’s total funding raised to an impressive $800 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir co-founder Joe Lonsdale, Instagram co-founder Mike Krieger and David Vélez, CEO and founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.

Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.