PeerTransfer Racks Up $6.4M More as Global Tuition Payments Grow
Iker Marcaide always sounds like he’s having a good time. Maybe it’s because he’s often talking to me from Spain, his native country.
Marcaide is the founder and CEO of peerTransfer, a Boston-based education finance startup. The 40-person company, which makes software for handling international tuition payments, has just raised $6.4 million from new backers QED Investors, Fides Capital, and Kibo Ventures (the latter two are Madrid-based), with participation from previous investors including Spark Capital and Maveron.
The round brings peerTransfer’s total raised to about $15 million. That’s still a drop in the bucket compared to the size of the international tuition-and-board market, which is something like $20 billion in the U.S. (Not to mention the $60 million funding rounds flying around for companies du jour like Snapchat.)
It sounds like the new money will be used to help peerTransfer sign up more colleges and universities and expand internationally. Most of the 350-odd schools it works with are in the U.S.—with payments coming from abroad—but Marcaide sees imminent growth opportunities in countries like Canada, Australia, and the U.K.
“We’re adding more currencies and trying to make a better experience for everybody,” he says.
PeerTransfer, which got started in 2009, is already in big schools like Cornell, UPenn, University of Illinois, and University of Washington, and the payments it processes come from nearly 200 countries. The startup says over a quarter of international students in the U.S. would be able to pay their tuition using its site. And Marcaide says revenue for last month was 13 times that of May 2012.
The firm’s sales strategy has been to work directly with colleges to try to streamline the international payment process, which is typically fraught with big fees and annoying exchange rates. As the company gets bigger and more established, though, it sounds like it could market itself to families as well—for example, to parents who end up sending kids to different colleges.
PeerTransfer’s story fits with several broader innovation themes as well. One is the burgeoning edtech and finance sector, driven by astronomical tuition rates and student loans. Another is the need to build companies that think and operate globally from day one. And a third is that peerTransfer is trying to better understand its customers’ buying behavior, down to the level of how many freshmen who sign up continue to use the service in future years—and how new students can help replace graduating seniors in the pipeline.
“As an entrepreneur, you go through this road of finding one problem and trying to solve it, but you gain awareness of more complicated problems of humanity,” Marcaide says. The best entrepreneurs, he says, are “not solving today’s problem, but ones that can help the world.”
So, with all that’s going on in the world of education and finance, does Marcaide think he’ll still be working in the sector in 10 years?
“I only know what I’m doing next week,” he says.