Spinwheel, a YBI Portfolio Company, Secures $11M Investment

YOUNGSTOWN, Ohio — An $11 million funding round will allow Spinwheel to introduce consumer debt solutions aimed at addressing the student loan debt crisis.

The Youngstown Business Incubator portfolio company announced the news Monday afternoon. The funding was led by QED Investors, Virginia, with participation from California-based venture capital groups Core Innovation Capital, Fika Ventures and Firebolt Ventures, according to a release.

Co-founded in 2019 by Tomás Campos and Tushar Vaish, Spinwheel began as a startup to help individuals get out of debt faster. It later transformed into a tool for current solutions to provide customers another resource to improve student debt solutions and short debt lifecycle.

“We see ourselves as the modern API infrastructure to help Americans understand, manage and pay their debt,” Campos said. “We want to start on student debt with people and grow with them as they make big purchases throughout their lives.”

The company was driven by Campos, who saw how student loan debt affected his sister and his niece.

“When my sister graduated, we thought it was an awesome milestone, but she was distraught over how she would pay her student loan debt,” Campos told Crunchbase News. “Since she worked for the government, she was rejected for student loan forgiveness and had to take all of her savings and put it toward the student debt. She had been saving for a house.”

In a statement on the Spinwheel website, Campos and Vaish report some 45 million borrowers collectively owe $1.71 trillion in student loan debt, affecting half of American households. Pairing that with the economic consequences of the COVID-19 pandemic, “we think it’s critical and good business for employers, retailers, banks, financial apps, and other institutions to support and participate in solutions for indebted Americans,” they write.

“That starts with giving these companies easy-to-use tools, modern technology, and intelligence to help folks understand, manage, and pay down their debt.”

Core Innovation Capital’s founder and managing partner, Arjan Schütte, told Crunchbase the firm invests in fintech companies and was particularly interested in student debt. After reviewing more than 100 applications in that space, the firm determined there needed to be a student loan payment-as-a-service, which it found in Spinwheel.

“Financial services are complicated, and Tomas and Tushar have an extraordinary motive for getting up in the morning. We were moved by what we felt was an authentic story and reason to chip away at student debt,” Schütte said. “If you are just doing it directly you are not going to get traction, but if you build it into existing channels, such as banks, grocery store points or airline points, there will be more success.”

The $11 million in funding will aid in the development of an application programming interface to embed loan management tools into the apps people use most, according to the release. It will also allow Spinwheel to scale its product roadmap and double its team of six in the next six months. Over the next 12 months, the company will also expand to other debt categories, including credit cards, auto and mortgage, according to the release.

Spinwheel’s clients include loan service providers, employee benefits, points and cash-back providers, as well as fintechs and banks looking to add these tools to their tech stack, according to the release. Clients are able to drop in Spinwheel’s low-code or no-code API and be up and running in under an hour.

With part of the funding going to help build out the Spinwheel team, it increases employment opportunities in northeastern Ohio, notes Corey Patrick, director of entrepreneurship services at the YBI.

“As someone who works with a lot of startups, this is one to watch. And if you’ve ever thought about working for a startup, this is one to consider,” said Patrick. “Spinwheel has been very intentional about building their team with the right people, in the right place, and we’re thrilled that they’re building their team here in northeast Ohio”

Barb Ewing, CEO of the YBI, is excited to see how this recent funding opportunity will impact both Spinwheel and the Valley.

“Watching Spinwheel build their company and create jobs in Youngstown is really gratifying,” said Ewing. “One of the principal reasons they were interested in coming to Youngstown was the local talent pool that could support their growth.”

“YBI is an amazing partner and resource,” Campos said. “Their team provided exceptional support and critical resources for us as we got off the ground and iterated on our offering. From early stage market research to key introductions, they have been an incredible asset. We look forward to building our team in northeast Ohio, and further leveraging the startup resources here.”

Published by The Business Journal, Youngstown, Ohio.