Blair

Blair was a San Francisco-based education finance company that funded students through income share agreements (ISAs), under which a student receives money for education costs and repays a percentage of future income instead of paying tuition upfront. Blair offered agreements from as little as $1,000 up to $25,000 regardless of the student's major, with no interest rate, repayment beginning one to six months after graduation, income share rates ranging from 0.1% to 15% depending on the applicant's circumstances, and typical repayment periods of about five years. Beyond capital, the company provided job placement help, mentorship, resume review and interview training to the students it financed.

Blair went through Y Combinator's Summer 2019 batch and was categorised under education and fintech. Its early cohorts of applicants were concentrated in computer science, nursing and business, though applications came from a wider range of fields. Applicants submitted a requested amount and supporting information through Blair's website and received a quote from the company.

Blair ceased its financing activity in 2022: all financial assets were sold to a global asset manager and the servicing arm was acquired by a separate servicer, after which Blair stated it was no longer engaging in any contingent financing arrangements, including income share agreements or deferred tuition agreements. The founders have attributed the asset sale to regulatory changes in the ISA space.

Founding story

Mike Mahlkow conceived the idea while studying abroad at the University of Southern California, where he observed that confusing loan terms and limited payment plan options left American students heavily indebted compared with the income-linked repayment arrangements more familiar in his native Germany. He founded the company in February 2019 with co-founders Constantin Schreiber, who dropped out of college to build it and led engineering, and David Nordhausen.

Business model

Blair originated income share agreements with students, funding them from debt capital raised from individual and institutional investors, and earned fees on the resulting cash flows rather than interest. It took 2% of student repayments plus a further 20% of amounts collected once its investors' funds passed a defined return threshold, making revenue contingent on graduates' post-education earnings.

Fee-based participation in student repayments: a 2% cut of repayments collected under each income share agreement, plus a 20% performance fee on funds above a set return level for the capital providers backing the agreements.

Traction

At the time of the Summer 2019 Demo Day, Blair had disbursed funds to about 15 students, had capital available for roughly 30 more, and had received applications totalling over $7 million. The company subsequently raised a debt fund of more than $100 million and financed thousands of students in the United States before selling its assets in 2022. Team size was reported as 10.

Latest developments

As of August 2022 Blair had sold all financial assets to a global asset manager and its servicing arm had been acquired by another servicer, and the company stated it was no longer engaging in income share agreements, deferred tuition agreements or other contingent financing arrangements.