- Brooklyn-based student financial success and emergency aid company Edquity announced it raised an oversubscribed $2.4 million seed round of financing
Brooklyn-based student financial success and emergency aid company Edquity announced it has raised an oversubscribed $2.4 million seed round of financing to expand its emergency cash grant and social services referral technology to additional colleges and universities. The investors in this round include ECMC Foundation — which led the funding round.
The Omidyar Network, Spring Point Partners, the American Family Insurance Institute for Corporate and Social Impact, and Michelson 20MM Foundation also joined the round. And as part of the funding round, WGU Labs also made its first investment out of its new seed fund and it will be overseeing a research study to assess the impact of Edquity on Western Governors University’s student population in 2020.
Edquity had previously launched its evidence-based technology to administer emergency aid and predictively refer students to emergency resources within the Dallas County Community College District last October — which was only 3 days after 10 tornadoes swept the region.
This technology successfully processed over 100 applications within the first hour of being live and has since deployed nearly $100,000 in emergency assistance, having processed more than 500 applications. Of the individuals who have received aid, 75% have experienced housing insecurity, 34% have been homeless, 53% have experienced food challenges, 50% have had children, and 30% have had a child under the age of 5.
“While only the public sector can address the root causes of poverty, we’re showing at Edquity that we are transforming emergency aid provision to stopgap some of the symptoms, and are doing so in such a way that not only manifests a win-win-win revenue model but also presents a massive long-term growth opportunity,” said David Helene, founder of Edquity. “Building a company that is laser-focused on putting the needs of the student first is hard work and requires a fierce commitment to our values, and we’re thrilled to partner with truly catalytic mission-aligned investors who can help us support postsecondary students of all ages and walks of life and realize our market opportunity in the process.”
Due to the success of the pilot, Edquity will be using the proceeds of the round to expand quickly through its national pipeline of colleges and universities.
“We believe Edquity has the potential to more efficiently and cost-effectively manage emergency aid on behalf of universities and colleges across the country, ensuring students are able to access the vital funding they need to persist through and complete their studies,” explained Jessica Haselton, director of program-related investments, ECMC Foundation. “We’re proud to have led the recent round of investments and hope that Edquity will be able to garner additional support from investors given the strong results from the pilot.”
There are 3 million college students who drop out every year due to a time sensitive financial crisis. And further, millions of students struggle with food and/or housing insecurity. These issues are not experienced equitably and students who disproportionately experience these issues include students of color, student parents, LGBTQIA+ students, veteran students, foster youth, and low-income students.
While colleges are investing more in student financial success programs — with 50% of colleges now offering an emergency aid program — these programs are less expensive to manage and suffer from a variety of challenges that limit their efficacy.
Based on leading research by Edquity’s Chief Strategy Officer Sara Goldrick-Rab — who also serves as the founding director of the Hope Center for College, Community, and Justice — Edquity was launched to support students around basic needs insecurity in a way that acknowledges the need for streamlined access to the safety net.
“We’re excited to grow the number of colleges we work with over the next 18 months to support students around financial emergencies and their basic needs and move the needle around promoting greater equity in postsecondary education,” added Helene. “With this funding round, we’re now uniquely positioned not only to redefine emergency cash grant assistance for students but also to reimagine students’ overarching financial experience in college, both as it pertains to their overall cost of living and access to financial services.”