Why We Invested in Tuition.io

Americans are being crushed by student loan debt, and the trend is continuing. More than 44 million Americans currently owe $1.5 trillion in student debt. By comparison, Americans owe $1.0 trillion on credit cards. Both numbers are so large they’re almost impossible to imagine, and similar problems are also growing in Canada and Europe.

Breaking down the number at a more granular level, about 70% of college graduates leave school with an average of $37,000 in student debt, with many exceeding $100,000 or more, and graduate students are often well north of $200,000.

Bottom line: Americans need help paying off their student loans.

Enter Tuition.io, who is on a mission to help companies attract and retain top talent by making life better for millions of student loan borrowers. As early stage investors, Wildcat looks for large, addressable markets with disruptive technology. Clearly, Tuition.io fits the bill.

The Company & Offering

Tuition.io partners with companies to offer their employees student debt repayment plans as part of their benefits packages. While many companies offer 401(k) contributions as a benefit, millennials saddled with large amounts of student loans can’t even imagine saving for retirement.

Tuition.io works closely with its partner clients to create and deploy a contribution program based specifically on the needs of their employees. Its platform also gives employees full visibility into their entire student loan debt picture, including projected payoff using different payment options and amounts as well as the impact of their employer’s contributions.

Tuition.io uses employment and student debt information, together with machine learning and advanced analytics, to helps manage and optimize the pay-off of a student loan holder’s obligation much sooner and with significantly less total cash out-of-pocket when it’s all said and done. It also manages all the payments and other logistics and compliance requirements to ensure the student loan reimbursement benefit is being applied and managed properly.

This is what we mean by disruptive: it’s a new idea addressing a major societal issue that threatens the financial well-being of a generation and all the economic implications that go with it, from delayed entry into the housing market, to delayed family building, etc. Hundreds of billions of dollars with significant economic impacts are at stake, and solutions are lacking. We seek to back companies going after trapped value at these scales.

Leadership

Tuition.io was founded by Brendon McQueen after he graduated from Columbia University and was faced with having to manage 12 different student loan accounts amounting to $120,000 in debt. Under McQueen, the company experienced a 1,700% year-over-year increase in participants, which paved the way for Scott Thompson, who took over as CEO in December 2016.

Thompson is a proven Silicon Valley executive and leader. Most recently, he served as CEO of ShopRunner where he led the company’s rapid retail and member network expansion over the last four years.

Prior to ShopRunner, Thompson was president of PayPal during its most rapid growth period. He helped grow revenues from $1 billion to $4.4 billion and established PayPal as the leading global online payments service.

Traversing the Traction Gap

The majority of the companies we invest in are either prior to or in what we define as the Traction Gap — the critical time in a startup’s journey between launching an initial product (IPR) and achieving minimum viable traction (MVT) on its way to scaling. For reference, this journey has four milestone points:

1. Initial Product Release (IPR), when a product first goes to customers for feedback
2. Minimum Viable Product (MVP), when customers start paying the startup for its product
3. Minimum Viable Repeatability (MVR), when a startup has its unit economics down and has a cohort of users that love its product
4. Minimum Viable Traction (MVT), where a startup has scaled its repeatable systems and turned on the customer acquisition or revenue (depending on the business model).

Tuition.io is right in the middle of the Traction Gap, closing in on MVR. The company has closed several important agreements with companies such as HP, LiveNation, Coupa, Estee Lauder, Mitre, HealthSouth, and the City of Memphis. They have also established partnerships with benefits companies like Mercer.

Summary

We believe Tuition.io can emerge as a leading FinTech platform. The company is helping employers provide non-traditional benefits that better align with the needs and wants of their millennial workforce while helping to address a national crisis that is only slated to get worse.

We have worked with Tuition.io since its inception and are excited to see their vision of helping ease the burden of student loans for the workforce become a reality.