Tala, a PayPal-backed lender, raises $ 110 million to enter India – TechCrunch

Tala, a startup based in Santa Monica, Calif., Which creates a credit profile to provide unsecured loans to millions of people in emerging markets, raised $ 110 million in a new roundtable to enter the sector fintech in full swing of India.

Series D financing for this five-year-old start-up was led by RPS Ventures, which also included GGV Capital and previous investors: IVP, Revolution Growth, Lowercase Capital, Data Collective VC, ThomVest Ventures and PayPal Ventures .

The new series, which brings the startup's total fundraising to more than $ 215 million, puts it at over $ 750 million, TechCrunch told a person familiar with the subject. Tala has also incurred additional debt of $ 100 million, including a $ 50 million facility run by Colchis over the past year.

Tala reviews texts and customer's call logs, traders' transactions, the overall use of the application and other behavioral data via its Android application to create their credit profile. Based on this information, his machine-learning algorithms assess individual risk and provide clients with instant loans ranging from US $ 10 to US $ 500.

This model differs from the way banks and most other online lenders assess a person's eligibility for a loan. Banks review the credit score of a user, while most online lenders check the financial history.

Tala is also much faster. It approves loans in minutes and disburses money via mobile payment platforms. Shivani Siroya, founder and CEO of Tala, told TechCrunch in an interview with TechCrunch that his company has already lent more than $ 1 billion to more than 4 million customers.

The start-up, which employs over 550 people, will use the new capital to enter India, said Siroya, who built Tala after interviewing thousands of small and micro businesses.

In anticipation of its launch in India, Tala launched a 12-month pilot program in the country last year to conduct user research and understand the market. She also set up a technology hub in Bangalore, she said.

"The opportunity is very great in India, so we spent time adapting our service to the local market," she said.

According to the World Bank, more than 2 billion people worldwide have limited access to financial services and working capital. For these people, many of whom live in India, getting a small loan is extremely difficult because they have no credit score.

In recent years, several major digital payment platforms in India, including Paytm and MobiKwik, have begun offering small loans to users. Traditional banks are still slow to serve this segment, according to industry leaders. (Outside of India, Tala is competing with five-year-old San Francisco-based startup, which has raised more than $ 170 million to date and signed an agreement earlier this year. with Visa.)

Tala goes one step further and takes responsibility for any unpaid return, Siroya said. More than 90 percent of Tala users repay their loan in 20 to 30 days and are repeat customers, she added.

The start-up also passes credit histories and positive rankings to local credit reporting agencies to help people secure larger loans in the long run, she added.

Tala, which charges a one-time fee of no more than 5% for each loan, relies on referrals and on some radio and television marketing to acquire new customers. "But a lot of these users come because they've heard from us from their friends," Siryoa said.

As part of the new round of financing, Kabir Misra, founding general partner of RPS Ventures, has joined Tala's board of directors, the startup announced.

Tala said he would use part of his new fund to expand his footprint and strengthen his team in its existing markets – East Africa, Mexico and the Philippines – and create new solutions.

Siroya said the startup had identified several other markets it wanted to serve. She did not reveal the names, but said she was considering other countries in South Asia and Latin America.