Prodigy Finance has completed a $40 million Series C round led by Index Ventures, with participation from Balderton Capital and AlphaCode. The company, which helps students fund their university business degrees, also announced $200 million in debt funding from a global investment bank.
Prodigy has provided over $325 million in financing to more than 7,100 students since it was founded in 2007, with the additional investment earmarked to build on that sum. And once more, it highlights the trend of young companies raising increasing amounts of debt.
While the credit facility could fund growth, Prodigy would do well to heed the lessons of VC-backed companies struggling after a debt round. SoundCloud was recently saved by an investment from Raine Group and Temasek after raising $70 million in debt during a turbulent year. Meanwhile, UK fintech DueCourse reportedly entered administration last month after raising a £5 million debt package in 2016 as part of a £6.25 million round.