California-based Microcredit Messiah, Tala, Raises $110 Mn in Series D from RPS & Others
Entrepreneur India got in touch with Shivani Siroya, Founder & CEO of Tala, a day before the announcement
California-headquartered fintech company, Tala, founded by India-born entrepreneur Shivani Siroya, has raised US$110 million in a Series D round of funding led by RPS Ventures, with participation from GGV Capital and existing investors including IVP, Revolution Growth, Lowercase Capital, Data Collective VC, ThomVest Ventures, and PayPal Ventures.
Siroya said that the funds will be used for fuelling expansion in India and other new markets, launching additional products, and growing the team across its offices in Kenya, Mexico, the Philippines, India, and California. “We will use the additional $100m in debt financing to support our loan book,” she added.
Launched in 2011, the micro loan startup operates in a business-to-consumer (B2C) business model, and provides loans starting from US$10 to US$500 on its smartphone app. Moreover, customers can receive and pay back their loans at over 40,000 pickup points (in addition to top mobile wallets), better navigate everyday financial challenges through our personalized financial education programs. According to the founder, Tala has, so far, burrowed loans amounting to US$1 billion to over four million customers.
Tala works closely with RPS ventures, which has a deep bench of experience in emerging markets and fintech.
Tala also has an interesting list of investors. To the question how Tala managed to garner the most bankable names on the investor’s front? Siroya said, “Investors were attracted to our unit economics and global traction. Not only have we built an end-to-end global infrastructure from scratch, but we have also proven the credit worthiness of millions of underbanked consumers around the world.”
Securing the Vision of the Firm
For a long time, banks were seen as the most important financial institution. But somehow, despite having them, a large population remains underbanked and underserved. To ease out the worries of this category, Non-Banking Financial Institutions (NBFCs) came into existence. Although NBFSc helped fill the gap to some extent, but the problems, nevertheless, remained the same. Fintech startups are turning out to be “messiahs” who are trying to reach the grounds to uproots the problems of the masses.
The Microcredit Messiah
A startling fact that Siroya points is that the 3 billion people around the globe do not have access to basic financial services, such as the ability to borrow, save, or grow their money. She said, “These are the people who are on the cusp of the global middle class – small business owners who want to invest in growth, salaried workers who need to cover expenses between paychecks, and parents who want to pay school fees for their children.”
According to the founder, the traditional banks are inept to fulfill the needs of this group of people. She said, “They live in areas where credit bureaus are unreliable or non-existent, or where digital access is still emerging. Without any formal financial relationships or data, traditional banks can’t understand or trust these people with products like credit.”
India, with 1.3 billion people, offers a massive market for fintech start-ups to tap and meet the credit needs of the growing economy.