Mpower, the top company on
Those who have not personally sought a student loan or migrated for their education have family or close friends who have. As pat as the cause might sound, it is fundamental to what makes Mpower a great place to work, according to Smadja.
“When you’re all working together toward a common goal, the passion and energy can be infectious,” he said.
Mpower finances college loans for international students, U.S. citizens, refugees, asylum seekers and U.S. residents with deferred deportation status under the Deferred Action for Childhood Arrivals program. It offers loans of up to $50,000 a year for two years and requires no co-signers, collateral or credit history.
The company has a secret sauce in its underwriting formula that allows it to offer loans on those attractive conditions, according to Mukul Gulati, a managing partner at the investment firm Zephyr Peacock, which began investing in Mpower in 2016.
“Traditional lenders in emerging markets make education loans based on collateral provided by parents of the student,” Gulati said. “For students from low-income families, financing options are not available for this reason. Mpower has a unique approach to student lending in that they underwrite loans based on a unique algorithm that predicts a student’s future earning potential.”
Mpower met a market demand that Zephyr Peacock identified in 2016 — international education loans. “Many aspirational students gave up on their dreams to study in North America due to lack of financing options,” Gulati said. “Mpower is solving that need.”
Not only is the company “making a difference in the lives of each student they help,” he said, but it also gets “fundamentally superior” returns on the individual loans it makes.
Smadja started Mpower after his own experience with this unmet need. “I struggled financially through school when I was an international student from France studying in the U.S.,” he said. “Ultimately I graduated, but I worked five different on-campus jobs and received significant support from my family.”
Smadja managed to support himself and helped finance his sister’s education, as well. “From that point on, I knew I wanted to make a difference for other international students,” he said.
That mission continues to drive Mpower and its culture of helping and empowering everybody on the team. For example, every employee receives stock options as part of their employment package. “We strongly believe that owners make the best employees and that a rising tide should lift all boats,” Smadja said.
This empowerment also extends beyond the office. Mpower offers each employee five paid days off a year for volunteering, and its COVID-19 sick-leave policy applies when taking care of a colleague or relative.
According to Smadja, four pillars make Mpower different as an employer: diversity, equity and inclusion; professional development; performance; and a nonhierarchical company structure.
Equity is a core piece of the Mpower product and strategy, according to Smadja. The company has headquarters in both the U.S. and India, which is partly why Mpower’s employees hail from 15 countries and speak 18 languages.
“We employ people of different faiths and residencies, including U.S. citizens, permanent residents, visa holders and DACA recipients,” Smadja said.
The company has a dedicated learning and development manager who focuses on creating companywide growth opportunities. Employees also have an annual allowance of $1,000 they can use for courses, conferences or other self-improvement means.
Mpower employees give and receive feedback monthly, and the company has weekly all-hands meetings to help “keep us aligned, connected and productive,” Smadja said.
That regular feedback is also part of the company’s nonhierarchical structure. Smadja said Mpower’s culture “strongly encourages employees to share feedback across departments and levels,” and the nonhierarchical workplace benefits both the minds and “health” of team members.
Those cultural elements have also impressed Zephyr Peacock, according to investor Gulati.
“Mpower’s international leadership team, their commitment to support employees, the energy and passion of the employees, and high employee retention were important factors in our decision” to invest, he said.
Even strong teams face considerable challenges. Smadja said Mpower’s culture “was put to the test when we went remote due to the pandemic.” He wanted to make the transition as smooth as possible, in part by making sure programs that were offered in the office, including monthly two-way feedback sessions and the company’s women-in-tech working group, were continued virtually.
As of April, Mpower was starting to shift back with the initiation of a hybrid work environment, with two days a week in the office. The shift has been accompanied by an increase in its investment in remote work.
“Our teams have long worked in multiple locations and were not always physically connected, but the pandemic has taught us how to utilize digital technology to better connect teams, manage projects collectively, delegate tasks, and empower each other,” Smadja said.
