KeyBank on Monday announced it has acquired Philadelphia-based GradFin, a fintech that advises borrowers on student loan debt repayment.
Financial terms of the agreement, reached on May 2, were not disclosed.
KeyBank in recent years has forged a growth strategy that emphasizes niche mergers and acquisitions – and the purchase of GradFin is part of another recent KeyBank takeover and build. .
The Cleveland-based lender, with $181 billion in assets, bought student loan refinancing startup Laurel Road in 2019, then tailored the platform for medical professionals. Laurel Road for Doctors, launched last year, offers a credit card with 2% cash back for paying off student loans, discounts for bundling savings accounts with student loan refinancing, and a financial informations.
“Laurel Road is thrilled to deepen our partnership with GradFin and bring the value of [public service loan forgiveness] guidance to nurses and other members who need it,” said Alyssa Schaefer, Laurel Road’s General Manager and Chief Experience Officer, at Crain’s Cleveland. with our understanding of the financial journey of healthcare professionals.”
GradFin lists 32 employees on the “team” page of its website. KeyBank said it was not disclosing how many of those workers would stay with the bank after the deal. However, Chris Walters, CEO of GradFin, will continue to lead the team, according to a press release.
“We are excited to be part of the Key team because of their exceptional track record in acquiring and growing fintech companies,” Walters said. “We couldn’t have asked for a better partner to help us embark on our next phase, continuing our mission to bring our lending education and market aggregation programs to financial advisors and their clients.”
GradFin will continue to work primarily out of Philadelphia and Boston and will retain its name for a transition period, Crain reported.
GradFin’s focus on student loan forgiveness comes into the KeyBank fold at an opportune time. President Joe Biden is reportedly wondering how exactly to follow through on a 2020 campaign pledge to forgive up to $10,000 in student debt per borrower, including setting an income cap for program eligibility.
KeyBank, meanwhile, said in Monday’s press release that the GradFin acquisition represents a “next step in large-scale digital innovation.”
“GradFin combines the best of digital and human interaction to create a unique customer experience,” said Jamie Warder, Head of Digital Banking at KeyBank. “Advisors fully understand the economic environment as well as the specific needs of healthcare providers, while the digital platform provides fast and efficient solutions for government debt relief and forgiveness programs. This approach fits perfectly with Key’s commitment to seamless customer interactions and provides a better in-class experience.
The GradFin deal marks KeyBank’s first acquisition since it bought payments startup XUP in November. The move was aimed at streamlining the bank’s merchant payment operations through deeper integrated banking services.
KeyBank CEO Chris Gorman told investors in March that the bank was considering “targeted investments, investments in teammates, investments in digital, investments in analytics and acquisition of niche businesses “, according to American Banker.