CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.
I caught up with CommonBond CEO, David Klein, yesterday to talk about this deal. The first thing I asked him was why? Why did his company acquire NextGenVest? David said, “we have not seen a company this good at engaging with Generation Z. Tomorrow’s millennials are Generation Z and it is important for CommonBond to get engagement with this new demographic early.”
He pointed out that 15% of all college bound seniors in New York, Chicago and Philadelphia use the NextGenVest service. And the engagement is extraordinary. Over 50% of all interactions between NextGenVest and their users are inbound from the users. What this means is that these high school and college students are reaching out proactively to NextGenVest for advice.
While CommonBond plans to roll this service out nationwide what David is most excited about is integrating the tech from NextGenVest into other areas of CommonBond business. In fact, David told me they have already started to do just that. The deal closed last week and they have hit the ground running integrating the staff and are planning a roll out of the tech into other business lines.
David emphasized the importance of reaching the new generation of potential customers early. This is what NextGenVest provides. They have 65,000 customers most of whom are in high school or college today. This is a huge potential channel for CommonBond and they hope to strike up a relationship with many of these people. Applying for college today is notoriously complex and a service like NextGenVest helps high school students wade through the masses of information needed to successfully land college admission. And it will also help them navigate the financial side of college, helping with financial aid, scholarships and, of course, student loans.
The financial details of this deal were not disclosed, all that David would say is that both sides were quite happy with the outcome. The acquisition is the second for CommonBond, they also acquired Gradible, a personal finance platform, back in 2016.
