Paytronage (acquired by Lumni)

Acquired by Lumni in May 2018. Founded by two Wharton graduates in August 2017, Paytronage was a dual-sided marketplace connecting institutional sources of capital to students interested in receiving income share agreements (ISAs), a novel financial vehicle whereby a student receives an upfront capital investment in exchange for a set percentage of their income over a fixed period of time. Competing in the $1.5T student loan space, ISAs have piloted successfully, with over 50% of students preferring the innovative income based structure for its ‘increased flexibility’, ‘alignment of goals’, and ‘career insurance.’ In the existing student financing market, most students only have the choice between different APRs and lengths. There is no optionality for students. With traditional debt, lenders and students are fundamentally misaligned on earning goals, systematically contributing to over 11.5% of students defaulting and the average student graduating with nearly $38,000 in debt. Paytronage was solving this macro issue by creating a centralized marketplace, which allowed investors the opportunity to assist in the future success of students, while creating necessary optionality for students. Paytronage’s core operational value proposition included a millennial-focused website with interactive graphics and calculators, fund-marketplace structure enabling students to choose and compare different ISAs that they qualify for, supported vector machine learning underwriting technology for investment decisions, legal navigation with internal counsel, systematized fund structure, fund management software analyzing the underlying assets, simplified investment process for investment funds, and outsourced ISA servicing for management.