Raise.me, a startup that hooks colleges up with high school students looking for scholarships, raised $12 million last week in venture funding which it will use to expand its service nationwide.
The fresh round of funding was led by new investor Redpoint Ventures, the venture capitalist firm that backs early stage startups including Guild, a student loan reduction benefit company. Other investors in the round include GSV Acceleration, Owl Ventures, First Round Capital and SFJ Ventures, reported TechCrunch.
Raise.me is an online platform that enables colleges and universities to reward high school students for achievements throughout their high school years in the form of college scholarships. Raise.me founder Preston Silverman recognized a problem so he turned to technology and created a marketplace. Each year colleges and universities give away $50 billion in scholarships, but Silverman says it goes to a small pool of recipients. Lots of high school students don’t think they can’t afford certain schools and don’t bother applying even though there is billions of dollars in aid available.
Under the program, high school students get micro scholarships from colleges around the country for academic and extracurricular achievements. Students set up an online platform, choose the schools they are interested in attending and then start earning. During high school students earn awards for good grades and for participating in certain activities.
Raise.me explains how it works on its website: Get an A in a course and colleges will pay from $100 to $1,000; earn a B and that declines to between $50 and $600; join a club or sports team and earn $25 to $250 depending on the school.
“Raise.me helps students prepare for college both financially and academically by incentivizing their academic and extracurricular performance, helping them meaningfully engage with prospective colleges earlier, and ultimately become more successful in college and beyond,” said Redpoint Ventures’ Chris Moore in a blog post announcing the investment.
Raise.me has partnered with more than 225 colleges and universities benefiting 650,000 students across the country. Raise.me kicked off its first pilot in 2013 and has helped colleges give students close to $1 billion in student aid. This year the average award size for high school students is $20,000.
Raise.me’s scholarship platform isn’t the whole basis of the San Francisco-based startup, though. With colleges spending $9 billion each year to recruit students, according to Redpoint Ventures, Raise.me thinks it has a unique way to provide better access to colleges and students, increasing the revenue the startup can expect to get. “Raise.me has the opportunity to reshape how colleges and prospective students connect with one another,” said Moore.
Raise.me’s funding comes at a time when the nation collectively owes $1.4 trillion in student debt with close to 44 million people owing at least some. That has paved the way for startups like Raise.me to address fractures in the student loan market—in this case the disconnect between colleges wanting to give and students looking for aid. Other student loan startups are offering refinancing while others have created platforms for companies to pay a portion of employees’ student debt all with an eye toward help borrowers get out from under the crippling debt.
Author: Andrew Rombach
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