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Barclays-backed Anthemis invests in regulated Future Earnings Agreement assets

StepEx, an FCA-regulated fintech that 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, has agreed a world-first deal for a financial institution to buy the receivable assets.

Barclays Anthemis will invest an initial GBP500,000 into regulated Future Earnings Agreements (FEA) assets via a special purpose vehicle (SPV), with the right to extend the investment to GBP10 million. 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 StepEx’s forecast of their expected earnings – starting only once they cross an agreed salary threshold upon completion of their course. 

StepEx charges course providers an up-front fee per student, and takes a small commission on each monthly repayment. The company has built the largest dataset of graduate earnings, which it combines with Open Banking data and a machine learning model to reliably predict and verify an applicant’s future earnings. 

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 GBP300 billion, and extends beyond IT to areas such as pilot training and law schools.

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