Tala, an emerging markets digital lender that provides consumers and small business owners with loans ranging from $10 to $500, has secured $145 million in Series E funding.
The investment was led by Upstart, a company founded by ex-Googlers Dave Girouard, Anna Counselman, and Paul Gu. The Stellar Development Foundation’s Enterprise Fund participated, alongside new investors Kindred Ventures and the J. Safra Group.
The round also included existing investors IVP, Revolution Growth, and Lowercase Capital, bringing Tala’s total capital raised to little over $360 million. Tala is now worth more than $800 million thanks to this new investment.
Unlike its previous funding round, where Tala raised $100 million in debt in addition to its $110 million Series D, this time the microlender only raised equity.
After leaving her job as an investment banking analyst in 2011, Shivani Siroya founded Tala. The idea came while engaging in some research for the United Nations Population Fund. She discovered that many people she talked to in emerging markets were creditworthy but lacked immediate access to credit and quick loans.
Additionally, according to World Bank statistics, over 2 billion of these people have restricted access to financial services and working capital.
Siroya concluded after a thorough examination of the causes creating the problem that the financial system in these markets was simply not intended to satisfy the demands of the underserved segment. And Tala could change that; and so far, it has (to an extent).
Tala launched its mobile application in Kenya in 2014 to provide people with credit and collateral-free loans, but it has since moved to the Philippines, Mexico, and, most recently, India. Users’ phone data and activity (such as the frequency and timeliness with which they pay their phone bills) are used to create credit scores that determine how much credit they can get.
Tala claims to have disbursed over $2.7 billion in credit to more than 6 million customers across these four markets since its launch.
Tala is transitioning to offer a broader range of financial services around an account and capture more value across the supply chain, with 12,000 new users signing up for credit every day.
Paul Gu, the co-founder of Upstart, and Denelle Dixon, the executive director and CEO of the Stellar Development Foundation, will join Tala’s board of directors as a result of the announcement.
Tala intends to expand its team in the four markets it serves as well as in the United States, where it is headquartered, with the new funds. Plans for geographic expansion will also be pushed ahead.