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Barclays Anthemis Invests in Future Earnings Agreement Assets To Boost IT Bootcamps Across Europe

Barclays Anthemis has invested £500,000 into future earning agreements (FEA) with StepEx to boost IT bootcamp expansion across the UK and Europe. 

StepEx agrees to the ‘first of many’ institutional deals seeing professional training providers sell regulated FEAs.

The fintech provides the infrastructure for universities, business schools and technical and professional/vocational course providers to offer qualifications in exchange for a share of students’ future earnings.

Barclays Anthemis will invest an initial £500,000 into regulated FEA assets via a subsidiary special purpose vehicle (SPV), with the right to extend the investment to £10million.

This is the first of a number of such deals that StepEx plans to do with asset managers.

Founded in 2017, and the only FCA-approved provider of FEAs, StepEx enables individuals who would otherwise be priced out to pursue the top academic, skills-based, and professional/vocational qualifications demanded by employers.

Students pay a percentage of their earnings for a fixed period – based on what they’re forecast to earn – starting only once they cross an agreed salary threshold upon completion of their course.

StepEx charges course providers an up-front fee per student, making commission on each monthly repayment. The company combines its dataset of graduate earnings with open banking data and a machine learning model to predict and verify an applicant’s future earnings.

Plans for the future

The deal with Barclays Anthemis will primarily focus on IT bootcamps, enabling training providers to immediately boost cashflow to fund expansion plans.

The market in the UK and Europe for financing the cost of professional skills qualifications is estimated to be worth £300billion and extends beyond IT to areas such as pilot training and law schools.

StepEx is already working with around 80 per cent of IT bootcamp providers in Europe, including international coding schools Le Wagon and Ironhack, as well as Makers Academy, CAPSLOCK, and Manchester-based North Coders.

It also has agreements in place with London Business School and INSEAD.

StepEx founder and CEO Daniel George
Daniel George

“Aside from being the first of its kind, this deal signifies the ability for training providers to cash in these receivables,” explains StepEx founder and CEO Daniel George.

“This means that rather than being locked into receiving payment for courses over a longer period, they can free up cashflow to invest in expansion – all of which will help to solve the skills crisis by giving more people who are less wealthy an opportunity to change their earning potential.

“At a macro level, there is a huge need to find solutions to IT skills shortages, both in the UK and across Europe. As part of the Autumn Budget in October 2021, the UK Government announced its ambition to quadruple the number of people trained in technical fields such as artificial intelligence and cybersecurity, with an emphasis on bootcamps.

“To grow that training capacity almost overnight requires significant capital firepower. We are the only ones in the world to hold these regulated assets, and know that institutions want innovative products unaffected by traditional market fluctuations.”

Farhan Lalji, managing director at Anthemis
Farhan Lalji

Farhan Lalji, managing director at Anthemis, said: “Broadening access to technical skills education is critical to ensuring as many people as possible are included in the economy of the future.

“The potential social impact of FEA is enormous – that, combined with their reliability as an asset, makes them an attractive investment.”

CAPSLOCK co-founder Jon Slater, added: “FEAs have helped CAPSLOCK remove one of the biggest barriers to career-changing education, which is large up-front tuition fees. Offering FEAs can come with cashflow limitations, though, and our ability to scale to meet demand is stunted because of this.

“By collaborating with StepEx to receive up-front fees, we can now provide this opportunity to as many people as possible without such limitations.”

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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