Page 6: Market Leaders - edly
Excerpt from Career Karma's State of the ISA Market 2019 Report
edly was one of the first platforms developed to help facilitate investments into Income Share Agreements. edly bridges the gap between schools and accredited investors who want to invest in ISAs, and makes it easier for schools to source the capital that they need in order to finance their ISA funds. edly has developed an ISA marketplace, which allows accredited investors to commit capital into ISA funds, and earn a return if a student succeeds. The platform aligns the interests of schools, students, and investors — schools have a financial incentive to invest in increasing student outcomes, and have an incentive to ensure that investors are satisfied with the stability of their investment. edly provides schools with comprehensive support in designing their ISA program and raising the capital they need to succeed. This involves evaluating the course structure, expected student outcomes, and reflecting on the needs of the institution and its students. edly will then handle student onboarding and compliance, and allows students who list cohorts on the edly marketplace to encourage more investors to commit capital to their program.
EDLY IS HELPING ENSURE SCHOOLS CAN ACCESS THE INVESTORS THEY NEED TO FINANCE THEIR PROGRAMS.
The other side of the edly marketplace is for investors. edly allows investors to buy “shares” in a pool of ISAs offered by an institution, which will reflect the overall returns of ISAs in the pool. Investors will provide the school with the capital they need to finance the student’s education, and students will repay the money only after they find a job that pays over a certain amount. This means that accredited investors have the ability to access this asset class and can reliably commit capital to ISAs as an investment class. For investors, edly offers access to diversification, a fixed minimum return while students are still in school and incentive alignment which will help increase student outcomes and maximize the investors’ prospects for returns. Thus far, edly has announced its partnership with Holberton School, a San Francisco-based coding bootcamp with schools around the world. edly will advance Holberton $2 million, and allow Holberton to list ISAs on the platform for professional investors to invest in.
Contributions to the ISA Market
The most important contribution edly has made to the market is that they are pioneering a new form of financial infrastructure around ISAs, aiming to turn ISAs into a professional asset class. edly has developed a marketplace for ISAs which allows both schools to raise the capital they need to finance their programs, and allows institutional investors invest in students and earn a return if they succeed. Indeed, in order for ISAs to grow, more capital will need to be available to institutions who want to start ISA programs. edly is bridging this gap and is helping ensure that schools can access the investors they need to finance their programs, without worrying about managing investor relations in-house. Further, edly is creating a stable financial instrument and is advocating for professional investors to commit capital into the space, which will help increase the availability of capital for ISAs in the future. Although edly is still at a relatively early stage, they have still set a strong precedent around ISAs as a financial asset, and have inspired helped significantly increase the availability of capital for ISAs.