When people think of the funding crisis in further education, thoughts normally turn to the rising price of a typical four-year college degree. But that’s not the only financial gap that exists: those who want to pursue hands-on careers in trades like medical technicians, automotive mechanics, welding, carpentry or air conditioning specialists also regularly find themselves out of pocket when it comes to paying for the required training that many of these jobs need. A startup called Fynn that has built a financing platform for these vocational hopefuls — a “SoFi for trade students” in a sense. It currently works with around 150 technical colleges in the U.S., and now with some traction — $4 million loaned since the platform first went live in the summer of 2022 — today it’s announcing $36 million in funding to continue building out its business.

Fynn’s funding is coming in two parts, an $11 million seed, and a $25 million debt facility for providing financing to students. The seed includes backing from Y Combinator, where Fynn first started as part of the Summer 2019 cohort (originally called TradeUp), and Susa Ventures.

Eric Menees, Fynn’s CEO and co-founder (with Ethan Anderson and Bhavin Gupta), said in an interview that the gap that Fynn is looking to fill is two-fold.

First, there is a distinct labor shortage globally. Countries like the U.S. have been hit with a triple whammy of more people than ever attending four-year schools, plus the knowledge worker and service industries (which require little to no experience or training) both growing, leaving a gulf that tradespeople used to fill. Trade jobs have the challenge of being at a higher bar: they may pay better than other service jobs (and some “knowledge worker” jobs) but to do them you need special skills and qualifications, and the work is by and large undeniably harder and potentially more risky.

Second, there is the issue of affordability. For those who do want to go into vocational jobs, typically they need to go through technical colleges to do so. And while the tuitions and the time periods are lower and shorter than those for four-year degrees, they are not insignificant.

“Some jobs like diesel mechanics have four-month training programs, and others like welding might be a year,” Menees said. Those periods are not directly proportional to tuition: it can cost between $15,000 and $20,000 to go through the welder training; while those four-month diesel mechanic courses are $10,000, he said.

And what’s more, because the colleges that teach these trades are not typically classified as educational institutions, those wanting to attend these are usually unable to access federal and state loan programs designed to give students a helping hand with finance.

“A typical profile for someone who wants to go to a trade school is an 18 year-old out of high school without credit history and working in something like the food service industry,” Menees said. “How is that kid supposed to get $10,000 to be in a mechanic program?”

Fynn takes an approach similar to that of others in other areas of vocational education like coding. It works on the principle of income share agreements, where it doesn’t require repayments until students have found jobs. It also gives users options like payment pauses and loan forgiveness if their jobs change or are lost. It also generally aims to be provide a very low-friction onboarding — promising answers in minutes to loan requests — but has built a risk assessment model that it believes has been solid at both providing financing for students at schools with strong course completion rates, and to would-be students who are most likely to graduate and get work.

Fynn says that currently those who take its loans and go through and complete courses get a 172% bump in salaries, and that currently 85%-90% of those who take loans get through their courses and get jobs.  (It also helps with job placement for those using its platform, a sign of how it might grow over time to cover other services beyond loans.)

Part of that risk model, Menees points out, involves “sharing risk with institutions in the space.” That is to say, big employers back these loans in part to get more talent in the door. They look to Fynn to do the vetting and take on the main part of the default risk, so that they do not have to.

“This provides a path to six-figure salaries” for people who might not have previously had it, Menees said.

Indeed, the fact that there aren’t a lot of financing options out there addressing the specific needs of vocation students says something about how this sector of the market has been overlooked, and in some regards misunderstood, up to now. Of course, Fynn’s success will almost certainly lead to more competition here, too. Why wouldn’t SoFi itself become the SoFi for vocational students?

For now, most of those would-be competitors have yet to pounce, though, leaving some interesting opportunities for Fynn.

“Having access to trade school programs shouldn’t be this complex, especially at a time when skilled workers are needed more than ever. There is still time to solve America’s labor-supply issues, which is good news,” said Leo Polovets, general partner at Susa Ventures, in a statement. “Our investment enables Fynn’s continued growth as a leader in skills-based education financing and allows them to continue helping low-income students achieve middle-class status through quality education.”

Updated to note that the company does not offer income share agreements.