Woman-led Tala Raises $ 30 Million Series B Micro Loans Via Smartphone

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Founder and CEO of Tala, Shivani Siroya. Photo: Ann Johansson / The Financial Times, c / o Tala.

Tala, a startup that provides micro-loans to entrepreneurs in developing countries through a smartphone app, has raised a $ 30 million Series B funding round as it expands into new geographic markets.

The round marks the largest series B raised by a founder in recent memory; in 2016, cult beauty brand Glossier raised $ 24 million. This capital injection brings Tala’s total fundraising to over $ 44 million since 2012.

The five-year-old company, formerly known as InVenture, helps underbanked people in emerging markets both get a credit score and get a small loan between $ 10 and $ 500 using just a smartphone app. Android.

Tala’s technology aggregates over 10,000 data points on every customer’s phone, from financial transactions to daily movements via GPS. It then builds a personalized credit score based on those habits and offers loans to those who qualify. The entire process, from downloading the app to approving, takes around five minutes.

To date, 66% of its 30-day loans have been used for small businesses. Of its borrowers, 36% were women – a significant share given the status quo in some developing countries.

“When you look at emerging markets around the world, only 7% of women small business owners have real access to capital,” said Founder and CEO Shivani Siroya. Tala loans average $ 50, with an interest rate of 11% and a repayment rate of over 90%.

So far, Tala operates in East Africa and Southeast Asia, in countries such as Kenya, Tanzania and the Philippines. With its $ 30 million Series B, it will expand further into South Asia and Latin America, with Siroya and his team of 75 people assessing opportunities in other markets.

“Even in the United States, there are around 70 million people who are undeserved by financial institutions,” she said.

Siroya started out in equity research at UBS, focusing on microfinance. She returned to school, earning a master’s degree in public health from Columbia University. She then spent two and a half years in the field in West and Sub-Saharan Africa and Asia, working for the United Nations Population Fund on a project to understand the effects of microfinance on entrepreneurs in developing economies.

During that time, she interviewed 4,500 people in nine countries, observing them during their workday, following them in the market and generally getting a feel for the habits and spending of these small business owners.

“I have become something of a traveling QuickBooks,” she said.

What Siroya has learned is that traditional financial services companies don’t always consider a person’s day-to-day life when deciding creditworthiness.

“If I looked at five companies that all look the same from the outside, the only way I would know who to lend to would be to know this person individually,” she said. “With the technology, we have the ability to do it in an automated way. It doesn’t cost as much to customize these products. We should be moving more towards that.

In addition to expanding into new markets, Tala will use a portion of its $ 30 million Series B to invest in technology, research and development.

The round was led by the late stage IVP company and joined by Ribbit Capital. Other participants included existing investors Lowercase Capital, Data Collective and Collaborative Fund.

IVP’s general partner, Jules Maltz, has joined Tala’s board of directors as part of the deal. He heard about Tala from Lowercase Capital founder Chris Sacca, one of the firm’s early investors.

Maltz sees Tala as a leader in a growing competitive market that includes Branch, a startup founded by one of the entrepreneurs behind the Kiva microfinance platform.

“The market is so big,” said Maltz, also an investor in Opportun, which markets loans to the underbanked Hispanic population in the United States, and SoFi, which refinances college loans. “There will be an opportunity for many players.”


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