Tala, a Los Angeles startup that makes microloans to consumers and small business owners in emerging markets, is announcing today that it has raised $110 million in funding. The new Silicon Valley venture capital firm RPS Ventures, cofounded by Kabir Misra, former managing partner at Softbank’s $100 billion Vision Fund, is leading the round. Tala’s backers include PayPal, billionaire Steve Case’s VC firm Revolution, Chris Sacca’s Lowercase Capital and Data Collective, among others. The new funding values Tala at nearly $800 million, according to an investor. Tala has raised more than $200 million in equity investment to date.
Shivani Siroya, 37, founded Tala in 2011 after stints as an investment banking analyst and as an analyst at the U.N. Population Fund, where she did socioeconomic research. Tala’s mobile app lets people in Kenya, the Philippines, Tanzania, Mexico and India take out small loans ranging from $10 to $500. Most use the app to invest in their small businesses, like shops and food stands. To evaluate borrower risk, Tala uses cell phone data instead of credit scores, looking at loan applicants’ habits, like whether they pay their phone bills on time.
Siroya first launched Tala’s app in Kenya in 2014. Today it has more than four million customers who take out three to six loans a year at a 10% average monthly interest rate. Its 600 employees are spread across offices in Santa Monica, Kenya, Mexico, the Philippines and India. The company made Forbes’ Fintech 50 list earlier this year.
Tala’s closest competitor is Branch, a five-year-old San Francisco company led by Matt Flannery, who previously cofounded donation crowdfunding platform Kiva.org. Branch has four million customers and an average monthly interest rate of 15%. Earlier this year, it raised $70 million in equity financing from investors like Visa and Andreessen Horowitz, plus $100 million in debt. Tala also raised $100 million in debt over the past year to help fund its loans.
With its new capital, Tala plans to make a bigger push into India and expand to new countries, potentially in regions like West Africa, Southeast Asia and Latin America. It also plans to launch new products. In Kenya, Tala has already tested a micro health insurance offering that would cover customer visits to a hospital. It expects to launch its first microinsurance product in the next 12 months. It has also piloted a financial education and coaching program, and it plans to test additional products over the next year.
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