Mobile lending app, Branch International just closed a humongous $170 million Series C funding round. This is by far one of the largest funding rounds ever recorded by a startup operating on the African continent. And it significantly poises the company for phenomenal growth and market expansion.
The new Series C round was led by Foundation Capital and Visa. The round also saw the participation of long time Branch investor and VC industry heavyweight, Andreessen Horowitz. Other investors in this round include B Capital, Formation 8, and Trinity Ventures.
Founded in 2015, Branch International is a microlending app targeted at the African and other emerging markets. The app offers loans between $2.50 and $1000 to more than 2 million users.
It charges 15% on these loans and, like many other digital lending apps, Branch uses proprietary technology to ascertain the credit worthiness of users. But how it does this is an interesting discussion.
Once downloaded and registered, the Branch app accesses and analyzes several user data stored in their phones. For instance, the app analyzes users’ bank SMS alert to understand their bank balance. It also analyses other credit alerts such as payment receipts to get a hint of how much a user spends. Of course, the app requires user permission before gathering and developing its credit analysis.
Meanwhile according to India’s Economic Times, Branch has processed 11 million loans and has disbursed over $250 million since 2015.
That’s a whooping sum!
The app is available in key markets like Nigeria, Kenya, Tanzania and Mexico. It made another international expansion when it debuted in India in March 2019.
Importantly, since its founding in 2015, Branch has raised over $254.7 million across several funding rounds. Despite tight competition in this market in different African countries, Branch has secured the confidence of several high profile investors.
One of such is Andreessen Horowitz. Long time big shot in the Silicon Valley venture capital universe, Andreessen Horowitz was one of the earliest backers of Branch. It led a $9.2 million Series A investment in the startup way back in 2016. This was the firm’s first ever bet on a startup operating on the African continent; a huge show of support.
From then on, raising new funds has been relatively easy. According to TechCrunch, Branch became profitable over a year ago. And this has helped it attract more investors and greater funding.
“Branch seems like an application of Silicon Valley tech to create financial services. But it’s substantially more interesting, because Branch is doing it in emerging markets where you don’t have a robust stack or credit bureaus or information that’s nearly as rich or as deep as in the Western world,” says Schwark Satyavolu, General Partner at Trinity Ventures.
Investors in the four year old startup include, Visa, Andreessen Horowitz, Khosla Impact Fund, Barium Capital, Victory Park, International Finance Corporation (IFC), Trinity Ventures, Formation 8, Foundation Capital, B Group and CreditEase Fintech Investment Fund.
Additionally, this latest round also signals another important partnership between Visa and a fintech operating in Sub-Saharan Africa. As part of the new deal, Visa will partner Branch to develop virtual prepaid cards for the latter’s users.