PayJoy, a pay-as-you-go smartphone financing firm has raised $20M Series B investment round led by Greylock Partners with participation from its seed investor Core Innovation Capital, its Series A lead Union Square Ventures, and a new African investor Echo VC.
As part of this investment Greylock Partners’ Josh McFarland will be joining its board. This brings our total financing in debt and equity to about $70M.
According to Mark Heynen, Co-Founder & Chief Business Officer at PayJoy, “This round represents a significant milestone for us. When we raised our Series A, we were primarily a finance company approving 90% of underbanked applicants in the US and Mexico for device financing using our software. We are now primarily an enterprise software company enabling the underbanked to get a phone or get a loan in over a dozen countries and we’re continuing to grow globally. Many of our partners have increased their approval rates from 10% to 90% and reduced their default rates by 50% using our software.”
PayJoy in November last year raised a $20 million debt-financing deal with Arc Labs for its patented, pay-as-you-go financing system which helps consumers with not only mobile device financing, but also unsecured lending, by using a customer’s phone for underwriting data and as collateral. The funding was to spread financial inclusion and alternative financing options nationwide in Mexico.
PayJoy invented pay as you go mobile financing with its proprietary Checkout tool which underwrites the underbanked, and Lock technology which blocks access to apps on a phone, except for emergency calls, when a customer does not make a payment.
PayJoy is taking the entry point to economic inclusion with a smartphone one step further by inventing the phone equity line: after paying-off a smartphone with PayJoy, they often qualify for an additional $100 loan collateralized by the device. Also, paid up underbanked customers usually attain an average credit score of 615 points, enough to apply and get approved for a credit card. PayJoy therein establishes a process to create financial identities and entrance to the formal financial sector for the base of the pyramid worldwide.
PayJoy’s technology aims to increase access to financing especially for people in developed markets who need credit but access is limited according to this World Bank map of access to credit worldwide.
Heynen adds that credit is sorely needed virtually everywhere as the middle class expands. But it requires assessing ability to pay and ensuring willingness to pay. PayJoys aims to help lenders world over to lend unsecurely using its PayJoy Lock — which converts smartphones into collateral, ensuring willingness to pay and reducing the burden on lenders to assess ability to pay.
“We enable credit not only through our patented technology but also our partnerships, and with this round we plan to invest in both,” said Heynen. “We plan to continue to add compatibility partners like chip makers and OEMs to ensure we are relevant to more end users.”
The firm plans to scale up its partnerships with lenders worldwide, specifically ones that have access to capital, underwriting, developers, and distribution via its offices in Mexico City, Jakarta, Singapore, Bangalore, and Johannesburg.
In February PayJoy, made its Access product compatible with Qualcomm® Snapdragon™ mobile platforms from Qualcomm Technologies, Inc. worldwide democratizing access to smartphones by providing financing to borrowers previously excluded from the banking system.