NEW YORK--(BUSINESS WIRE)--Sparrow, a two-year-old financial search engine that simplifies the student lending process, today announced the raise of a $5.83M Seed investment led by Sozo Ventures with participation from Good Friends VC, SHAKTI, Dash Fund, Ripple Executive Chairman Chris Larsen, and Stash CFO Adriel Lares. With $6.7 million of capital raised to date, Sparrow is using the funding to grow its platform, facilitate new partnerships and reach additional students and universities. Sozo Ventures Managing Director Spencer Foust also joined Sparrow’s Board of Directors.
More than 43 million Americans are carrying $1.6 trillion worth of federal student loan debt. While President Biden’s relief plan provides progress to reduce crushing student loan debt in the United States, on average, it takes borrowers 20 years to fully pay off their student loans, burdening them with significant debt for the first quarter of their adult life. Sparrow is committed to accelerating the transition from an antiquated system that doesn’t have students’ best interests in mind to a sustainable financial product that provides a fast, seamless and secure lending experience.
“Pursuing education should be an opportunity, not a handicap. Yet today, the price of that education is a non-starter for many students,” said Sparrow co-founder and CEO Harrison Hochman. “Figuring out how to pay for college is more stressful getting into college itself. We’re committed to changing that. Sparrow makes securing a student loan as simple as finding and purchasing a plane ticket online. We provide maximum visibility and flexibility on terms, pricing and timing so that there are no surprises about actual costs. Borrowers have already been saving thousands per loan.”
Sparrow finds students the best private student loan or refinancing options personalized to their specific needs, in a timely manner. For enterprises including news sites and financial lenders, the platform enables them to provide their consumers with a comprehensive, end-to-end student loan marketplace that is currently impossible under an affiliate model.
“Having spent nearly three decades as an executive in higher education, I've seen many attempts at trying to affect systematic change. We signed our partnership with Sparrow and had their program launched to students within three weeks,” said Scott Friedhoff, Retired Vice President of Enrollment at The College of Wooster. “With Sparrow, we can now guide students and parents better and with great confidence that they will manage four years of college expenses wisely. Sparrow made that possible.”
As students continue to search for more affordable ways to pay for college and lenders look to offer better solutions to their customers, Sparrow has experienced rapid growth and adoption since it launched 12 months ago, including:
- Enabled $200 million of cumulative total searched loan volume, with an average MoM growth rate of 54%
- Saved borrowers an average of $9.6k per student loan refinancing
- Integrated 17 lenders to the platform
- Reduced the average time spent choosing a loan via Sparrow to 20 minutes, 15X faster than industry standard (300 minutes)
- Increased its application submission rate to 84%, 10% higher than the industry standard of 74%
“For a lot of young people, paying for college is their first major financial decision, and one of the most expensive they will make in their lifetime. It’s important they make the right decision when taking out a loan because this debt will be with them for decades, ” said Sozo Ventures Managing Director Spencer Foust. “Sparrow helps students get the best price for their education, and opens the doors for a potentially deep and valuable relationship between lenders and borrowers, an area that is lacking innovation. Harrison and his team are working diligently to crack this problem by building a trusted, efficacious fintech solution to change the way students pay for college.”
Sparrow was founded in 2020 by Hochman, Griffin Morris and Daniel Kahn. Headquartered in New York, the team plans to triple its headcount to over 20 people within the next 18 months.
About Sparrow
Sparrow allows users to search and compare personalized student loan offers through a single application, bringing simplicity, choice, personalization and transparency to an otherwise inefficient and opaque lending process. Founded by students for students, Sparrow’s mission is to accelerate the transition to sustainable finance. Learn more at www.sparrowfi.com and follow us on LinkedIn and Twitter.
About Sozo Ventures
Sozo Ventures, a leading global acceleration and expansion venture capital firm, led the $5.83M Seed round. Sozo's portfolio includes Zoom, Twitter, Square and Coinbase, as well as supply chain technology providers Flexport, Kargo and project44.
