Nearpeer connects incoming college students based on shared interests and life situations with the goal of making those students more committed to the college track. (Image courtesy Nearpeer)

Nearpeer, a Portland-based edtech startup that aims to improve student retention and graduation, recently closed a $400,000 financing round.

The company reported the financing in a Form D filed with the U.S. Securities and Exchange Commission.

Dustin Manocha, who founded the company in 2017, tells Maine Startups Insider that the money was raised via a convertible note in December 2019 and structured to convert to equity on Jan. 2, 2020, in order to qualify for the tax credits that would become available under the Maine Seed Capital Tax Credit on the first business day of the year.

Manocha said the funds raised would be used to “fuel revenue growth and accelerated investments in our technology platform.”

Nearpeer is tackling a problem that colleges and universities deal with called “summer melt,” which is when incoming enrolled students never actually show up on campus in the fall—whether because of financial worries, fear, loneliness, or just plain apathy, they simply melt away. This “melt” costs schools millions each year in lost tuition. Nearpeer believes its technology solution will foster more connections between incoming students over the summer and, in doing so, help encourage more of them to show up to campus in the fall.

[Read more about Nearpeer in the profile MSI wrote in December 2018.]

Nearpeer claims its summer 2018 rollout at the University of Maine in Orono helped reduce melt by 16% and increase first-year tuition revenue by $500,000.