Sparrow makes it easier to find more than $200 million in loan volume as students return to school

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NEW YORK–(BUSINESS WIRE)–Sparrow, a two-year-old financial search engine that simplifies the student loan process, today announced it has raised an initial $5.83 million 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 in capital raised to date, Sparrow is using the funding to grow its platform, facilitate new partnerships, and reach other students and universities. Sozo Ventures managing director Spencer Foust has also joined Sparrow’s board.

More than 43 million Americans carry $1.6 trillion in federal student debt. While President Biden’s relief package helps reduce the crippling student loan debt in the United States, it takes borrowers an average of 20 years to repay their student loans in full, leaving them with significant debt during the first quarter of their adult life. Sparrow is committed to accelerating the transition from an outdated system that disregards students’ best interests to a sustainable financial product that provides a fast, seamless, and secure lending experience.

“Going to school should be an opportunity, not a liability. Yet today, the price of that education is a non-starter for many students,” said Sparrow co-founder and CEO Harrison Hochman. “Understanding how to pay for college is more stressful than getting into college itself. We are determined to change that. Sparrow makes getting a student loan as easy as finding and buying a ticket. ‘plane online. We provide maximum visibility and flexibility on terms, pricing and timing so there are no surprises on actual costs. Borrowers have already saved thousands of dollars per loan.

Sparrow finds students the best private student loan or refinance options customized to their specific needs, in a timely manner. For businesses, 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 not possible under a affiliate model.

“Having spent nearly three decades as a higher education executive, I have witnessed many attempts to bring about systematic change. We signed our partnership with Sparrow and launched their program to students in three weeks,” said Scott Friedhoff, retired vice president of enrollment at the College of Wooster. “With Sparrow, we can now better guide students and parents and with great confidence that they will manage four years of college expenses wisely. Sparrow has made this possible.

As students continue to seek more affordable ways to pay for their education and lenders look to provide better solutions for their customers, Sparrow has seen rapid growth and adoption since its launch 12 months ago, including:

  • Activated $200 million in cumulative total volume of loans sought, with an average growth rate of 54% over MoM

  • Borrowers saved an average of $9,600 per student loan refinance

  • Integrated 17 lenders into the platform

  • Reduced average time spent choosing a loan through Sparrow to 20 minutes, 15 times faster than the industry standard (300 minutes)

  • Increased its application submission rate to 84%, 10% higher than the industry norm of 74%

“For many young people, paying for college is their first major financial decision, and one of the most expensive they will make in their lifetime. It is important that they make the right decision when taking out a loan because that debt will be with them for decades,” said Spencer Foust, Managing Director of Sozo Ventures. “Sparrow helps students get the best price for their education and opens doors to a potentially deep and valuable relationship between lenders. and borrowers, an area that lacks innovation Harrison and his team are working diligently to address this issue by creating a reliable and effective fintech solution to change the way students pay for college.

Sparrow was founded in 2020 by Hochman, Griffin Morris and Daniel Kahn. Based in New York, the team plans to triple its workforce to more than 20 people in 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 loan 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, one of the world’s leading accelerator and expansion venture capital firms, led the $5.83 million seed round. Sozo’s portfolio includes Zoom, Twitter, Square and Coinbase, as well as supply chain technology providers Flexport, Kargo and project44.

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