A company which provides outcome-based finance for postgraduates has raised £1.1 million in pre-seed funding. 

StepEx’s machine learning model pairs graduate earning data with open banking data to predict and verify an applicant’s future earnings. 

Regulated by the FCA, it provides affordable student finance based on these future earnings rather than debt. 

Founded in 2017 by Daniel George, it is focused on postgraduate university education and technical skills courses. It is already working with London Business School, INSEAD and Cranfield University. 

The investment round was led by BBVA Anthemis Venture Partnership, Triple Point Ventures and FinTech angels including Chris Adelsbach.  

It will be used to further develop the company’s machine learning model and user platform, as well as expand its senior team. 

“Using outcome-based finance to expand access to postgraduate business degrees and professional or technical qualifications could increase. But that doesn’t account for a whole host of other qualifications that could unlock new, higher-earning opportunities for people in what used to be called ‘blue collar’ occupations,” said founder and CEO Daniel George.  

“The Future Earnings Agreement model works just as well for an Amazon warehouse worker who wants to earn more money as a truck driver, but can’t afford the training, as it does for a freelance designer wanting to develop coding skills or an entrepreneur currently priced out of an MBA.  

“This is about fighting the curtailment of aspiration and allowing talented people from all walks of life to access the career they want. And by unlocking economic opportunities, we’re not just helping individuals earn more, but also boosting the nation’s productivity and tax receipts.” 

These Future Earnings Agreements require students to pay a percentage of their earnings for a fixed period once they cross an agreed salary threshold, as predicted by StepEx’s forecast of their expected earnings. 

It charges course providers an up-front fee per student and takes a small commission on each monthly repayment. 

Christhi Theiss, Head of BBVA Anthemis Venture Partnership at BBVA, said: “From the beginning of our journey, StepEx and its founder Dan stood out. His passion, know-how and grit impressed me.  

“He effectively co-designed a new regulation over 18 months with the UK government and succeeded to be the first regulated entity in Europe to offer Future Earnings Agreements.  

“Many renowned educational institutions all over Europe are offering StepEx’s solution to their students, which increases diversity and financial inclusion – while also collecting an incredible amount of data to develop StepEx’s proprietary future income predicting tool.”