What is the best growth path for CommonBond which would allow it to expand without diluting its closely held mission or key competencies?
CommonBond is a marketplace lender that focuses on refinancing of student loans by offering lower interest rates than traditional lenders. By 2019, seven years after its launch with $3.5m in start-up funds, CommonBond had funded over $2.5 billion in loans but had ample runway to grow its core $211 billion market or other consumer debt markets. From inception, CommonBond grew through savvy customer selection, value-focused positioning as a “force for good,” occasional acquisitions and financial innovation, including the first adjustable-rate student loan refinancing product. In this case, students will learn about the student loan market, including key concepts like securitization, as well as factors that drive the demand to refinance. Students will be asked to consider the various market routes that CommonBond can take as it grows from nascent lender to mature market participant.
Case ID: 220306
Supplemental Materials: Excel Spreadsheets