Chipper raises $5.6m to eliminate student loan debt

By Edlyn Cardoza

Chipper, the app working to empower student loan borrowers to chip away at their debt faster, recently announced that it has received a $5.6 million seed investment. The round was led by Freestyle Capital, Slauson & Co., and Propel Venture. Backers also include investors from the Cap Table Coalition and FinTech leaders Ethan Bloch of Digit, founder of Loop John Henry, and Craig Lewis of Gig Wage.

With this investment, Chipper expects to quickly grow its existing user base of 80,000+ users, as 45M+ people will go back into repayment in May. Funds are allocated in preparation for the moratorium lift through team growth, marketing, and product expansions, including launching new programs like Chipper Rewards. Chipper is on its way to emerge as a go-to app for paying off student loans by accelerating its capabilities and offering comprehensive solutions to its users.

“As a first-gen high school and college graduate who experienced the trials of conquering student debt, I wanted to create a simple solution for all student loan borrowers to manage their debt and navigate a realistic path to financial freedom,” said Tony Aguilar, founder and CEO of Chipper. “With this new round of funding and payments resuming in May, we know 2022 will be a big year for Chipper. This funding will allow us to grow our user base and help borrowers with their student loan journeys from start to finish.”

Launched in 2020, Chipper empowers student loan borrowers to improve their financial health by providing transparent, seamless student loan repayment solutions and is the only student loan app to support borrowers in every step of their journey. Chipper saves users an average of $309/month and has helped qualified applicants receive a total of $81 million in forgiveness since its launch. The company is growing 40% month over month, demonstrating its unique position in the student loan space.

Chipper’s revenue is obtained through a tiered membership program, and it’s completely free to sync loans from your servicer and explore forgiveness and repayment options. Users can enrol with Chipper+ for additional support, auto-enrollment for forgiveness or repayment programs, and access to round-ups for $4/month. Users can also access the round-ups service on its own for $2/month. For now, all Chipper services are free until the loan moratorium is lifted on May 1, as borrowers aren’t making payments.

“This funding round is more than an investment in our product and team; it is personal for me as a Latino founder as we work to close the gap on both sides of the table in venture capital. As we climb, we must pull others along with us where we can. We started Chipper with the mission of helping those hit the hardest by student debt, which are people of colour. I’m excited to partner with the Cap Table Coalition and pledge more than 25% of this round to diverse investors,” said Aguilar.

“This new funding round positions Chipper for tremendous growth in the year ahead,” said Austin Clements, managing partner at Slauson & Co. “We believe that Chipper is revolutionizing the way people approach the difficult and confusing student loan process, making it digestible and far more accessible to the millions of people that need them. We are proud that this joint investment will allow Chipper to chart new paths for expansion and product development, all contributing to its greater mission to help millions of post-graduates grappling with student debt, especially people of colour and women. Slauson & Co. looks forward to what Tony and Chipper will accomplish with this new investment.”

There is a gap in the VC community, with only 3% of venture capital investors being Black or Latinx, and only 1.1% of all private funds having Black, Latinx, or female managers. The Cap Table Coalition is an organization of high-growth startups, VC firms, and emerging fund managers working to close the racial wealth gap. The Cap Table Coalition provides a simple way for companies and firms to increase representation and funding in the venture capital ecosystem. High-growth startups looking to get involved can pledge to allocate 10% of their funding rounds to the organization to distribute to Black, Latinx, and other underrepresented investors. Chipper is taking this commitment one step further and contributing 25% of the company’s seed round to the coalition.

“This funding round is a prime example of what can be achieved if we bring together founders and diverse investor groups looking to transform the venture capital landscape,” said Elizabeth Grier at The Cap Table Coalition. “These investors envision the future of venture capital—and technology as a whole—as one that is inclusive of great minds from all gender groups, ethnic backgrounds and walks of life.”