Fintech has truly gone global. Digital lender Tala has raised $145 million in a Series E funding round that they will use to expand and grow their service offerings in four emerging markets. Founded in 2011, Tala’s core customer base is the underbanked. The product—currently available in Kenya, the Philippines, Mexico, and India—offers loans to consumers and small business owners between $10 and $500. Founder Shivani Siroya was inspired to start the company after engaging in research for the United Nations Population Fund. Her findings included data that supported the idea that people in emerging markets were credit-worthy but simply lacked access to credit and quick loans.
Since its inception, Tala has disbursed over $2.7 billion in credit and collateral-free loans across more than 6 million customers. The company creates makeshift credit scores for users using their phone data and activity (i.e. how frequently they’ve paid their phone bill on time), which determines the amount of credit a user can receive. Loans are approved within minutes and more than 90% of customers have repaid their loans within 20-30 days, according to the company.Tala’s success has encouraged the two-time CNBC Disruptor 50 to expand its offerings into the flourishing crypto market. The company announced a partnership with Visa this past May that will see the two organizations build a platform that will allow Tala’s users to buy cryptocurrency like USDC.
This most recent round of funding furthers their crypto investment and will lead to an expanded slate of financial service offerings. Two of the investors, AI lending platform Upstart and the non-profit Stellar Development Foundation, will work with Tala to develop the first mass-market crypto product for emerging markets. Tala will use blockchain-based finance to connect investors with borrowers on its platform, allowing its customer base to use crypto to send money across borders and opening up their access to the global financial system.
Legacy Banks Partner with Fintech Upstarts
Tala’s fundraising and partnership with Visa follows a trend of legacy banking and credit institutions partnering with hot-shot startups to bulk up their fintech and crypto offerings. Citi Bank has unveiled plans to build a marketplace of third-party fintech apps available to its customer base, while JPMorgan Chase purchased three major firms in 2021, including OpenInvest and 55IP. Visa has also partnered with Tala’s competitor Branch which also offers a full suite of digital banking services in emerging markets like Nigeria, Kenya, Tanzania, and India.
All this movement in the space is taking place concurrently with crypto’s adoption as an increasingly recognized form of payment and currency across the globe. Earlier this year, El Salvador became the first country to adopt bitcoin as legal tender after their congress voted in favor of the proposal 62-22. The Central Bank of Hong Kong also announced its intentions to explore digital currencies in October 2021.
Following this new round of investment Tala is now valued at more than $800 million according to TechCrunch. The company will continue to offer an expanded range of personalized credit and banking options, like longer-term loans to the more than 2 billion people who have limited access to financial services. The growth of its team across the four markets it currently serves is planned, with future geographic expansion expected in the future.
You can read more about trending fintech companies here or explore other ways the technology is being applied on our Fintech Overview page.