In July 2023, Scholly reached a pivotal milestone to further provide access to higher education for students who don’t have the financial means.

As previously reported by AFROTECH, Scholly was acquired by Sallie Mae, which announced it would make the college scholarship app free for all students, families, and other users.

How did the companies initially join forces? During an interview with AFROTECH, Scholly Founder and CEO Christopher Gray shared a detailed timeline. 

Prior to the acquisition, Gray shared that Sallie Mae reached out in February 2023 for a partnership. Then, the two concluded that it would make sense to go the acquisition route, including acquiring the entire Scholly team. Despite a bump in the road during due diligence — resulting in a longer process — Scholly and Sallie Mae ultimately were able to move forward with the deal.

“When people think of Sallie Mae and they think of Scholly, they think they’re two contradictory forces,” Gray told AFROTECH. “They think, Sallie Mae is student loans and Scholly is scholarships, like what’s the marriage here?”

He added, “What [Sallie Mae] really wanted to do is acquire Scholly, make the app free and be able to really give students access. What people fail to understand is that Sallie Mae is actually a private student loan lender, so you need like over a 700 credit score to even get [a loan]. Most student debt is actually federal, so they’re actually not taking up a lot of that…[Sallie Mae] is more incentivized to make sure that you’re getting free money first.”

In addition to clarifying why Scholly and Sallie Mae partnered, Gray described the acquisition as “very rare.”

“I think being one of the first Black tech companies to get acquired by a bank, that’s really a big achievement,” he said. “I think we were actually probably the only Black tech exit last year in that ecosystem.”

Although Gray was excited about the announcement, he faced the backlash that oftentimes comes from the Black community when Black-founded companies are acquired. Gray’s response to the likes of criticism such as “selling out” is that he believes more exits should be celebrated. He believes it should be the goal of a company as it allows for second-time founders to start larger companies. What’s more, he says that exits lead to more wealth and job creation for the Black community.

“I agree that if you raise capital, it’s your fiduciary responsibility to have an exit to return your return capital to your investors,” Gray said. “That’s just a given.

“I think, two, people [need to] understand the wealth creation of just being able to [be acquired] and what that does for a community,” he continued. “I now have employees, investors — and even myself — that made millions of dollars. I mean, that is transformative because now, I can invest in other companies. I can start other companies…I have the ability to not have to think about raising a pre-seed or seed round. Being able to have that freedom.”

Since being acquired, Sallie Mae’s widespread reach has led to the spiked increase of Scholly’s app downloads, Gray told us. In addition, the two have been able to work together to provide students with additional scholarships. The impact has included awarding $250,000 in scholarships to 25 Historically Black Colleges and Universities (HBCU) students and $250,000 to HBCU Week Foundation, Inc. to support access to HBCUs. Additionally, Sallie Mae committed a $1 million research endowment to Delaware State University to close the completion gap.

“Since they’ve acquired Scholly, we’ve just done the work because I told them if we’re going to do this that I want Scholly to continue our mission,” Gray emphasized. “I want us to hit our goals and hit our metrics…I want us to really focus on what we’re going to continue to do for people of color and the impact that we’ve had.

He added, “We’ve got over five million users and we’ve had this track to help students [win] $100 million in scholarships and just being able to continue that mission. I made sure that was something I wanted to do as a part of that deal. And, so far, we’ve been able to see that through.”