The advent of mobile money services has led to 1.2B people across the globe opening accounts for the first time since 2010. Yet there are still 1.7B unbanked adults; 3.4B are underbanked. Technology will be the primary driver to ensure that financial inclusion will continue to rise globally. Tala is focused on providing financial and banking services to the underserved in emerging markets with its expanding suite of financial services. Since 2014, the company has provided instant microloans in Mexico, the Philippines, India, and East Africa without requiring any formal credit histories. By leveraging AI, the company has built a sophisticated underwriting system that doesn’t need the traditional loan assessment inputs found in places where lending is more formalized. Since its founding, Tala has served over 6M customers that have borrowed in excess of $2B. With foundational customer relationships already in place and with the trust of the communities served, the company is now expanding its offering to provide more services beyond loans to ensure that people are able to access the financial services including payments, savings, and enhanced credit facilities without having to work with analog and inaccessible banks or predatory providers.
LA TechWatch caught up with Tala CEO and Founder Shivani Siroya to learn more about what led her to build tech-enabled solutions to address the massive market opportunity to serve the underbanked globally, the company’s strategic plans, latest round of funding, and much, much more.
Who were your investors and how much did you raise?
We raised a $145M Series E round led by Upstart with participation from the Stellar Development Foundation. New investors Kindred Ventures and the J. Safra Group, along with existing investors including IVP, Revolution Growth, Lowercase Capital, and PayPal Ventures also joined the round, which brings Tala’s total funding to more than $350M.
Tell us about your product or service.
Tala is a global technology company on a mission to enable financial agency for the billions who are underbanked around the world. Our pioneering instant credit app launched in Kenya in 2014 and has helped more than 6 million people across East Africa, the Philippines, Mexico, and India start and expand small businesses, pay school fees and bills, and lead more stable financial lives. Anyone with an Android smartphone in our markets can download the Tala app, apply for a loan, and receive an instant decision, regardless of whether they have a formal credit history. Our AI-powered underwriting models leverage alternative data to understand their potential and design a personalized credit offer. Tala’s 100% digital servicing means that most customers can go from downloading the app to having money in their account in under 10 minutes.
With this new funding round, we are expanding beyond that core credit experience to offer more holistic financial services that help customers manage their day-to-day needs, build financial resilience, and pursue both personal and financial goals with confidence. This evolution is a natural application of our proprietary technology and deep consumer trust.
What inspired the start of Tala?
While working for the United Nations Population Fund, I interviewed thousands of people in India, Sub-Saharan Africa and other emerging markets to study the impact of microfinance on their lives. I began to see that the biggest obstacle to broadening financial access was lack of data – without data on underbanked populations, banks couldn’t make lending decisions or design useful financial products.
So I started lending to some of these individuals out of my own savings, and in doing so, I realized I was using details from their daily lives to decide who was trustworthy – not traditional financial indicators. I started to brainstorm ways to capture and use the data generated by people’s daily lives to build a credit score for them. And that’s how Tala started.
How is it different?
The number of accessible and responsible financial providers who serve the underbanked segment are few and far between. We are truly unique, as no other company has the geographic breadth of Tala – and no other fintech company is specifically serving this segment. We’ve rebuilt the value chain from the ground up, and as a result, we have the customer trust and technology to build a market-leading financial account experience.
What markets are you targeting and how big is it?
Tala currently serves customers across Kenya, the Philippines, Mexico, and India, but our ambition is to reach billions more around the world who are in need of responsible financial services. Nearly 3 billion people globally are considered financially underserved– that’s nearly 40% of the world. The market opportunity (almost $2.1 trillion) is vastly unmet for credit in developing countries. We’re meeting this need by providing financial services via a highly sophisticated underwriting and payments platform, to many for the first time ever.
What are your post-COVID office plans?
In 2022, our U.S. team will be shifting to a remote-first work environment and we will maintain our Santa Monica headquarters as a hub for meetings, team building activities, and planning retreats. As a truly global company with offices in Kenya, the Philippines, Mexico, and India, we were already accustomed to lots of video calls and distributed teams so in many ways this decision was an extension of our existing culture.
What was the funding process like?
The fundraising experience is always stressful but thankfully we had incredible partners in the process. Our two lead investors Upstart and Stellar share our vision of radically opening financial access and putting more control directly into the hands of underbanked and underestimated people. Since the Stellar network leverages interoperability with the world’s existing financial systems, partnering to leverage our Tala technology together, specifically for crypto solutions, is a powerful tool to bridge gaps for those who have been left out. Upstart also is an invaluable partner as they have extensive experience using modern machine learning to help banks and credit unions originate over $13.6 billion in loans which allows for higher approval rates and lower loss rates. Additionally, I am happy to share that as part of this fundraise, Paul Gu, cofounder of Upstart and Denelle Dixon, CEO and executive director of the Stellar Development Foundation, joined our board of directors.
What factors about your business led your investors to write the check?
I think the main factors that attract investors to Tala is that we’re tackling one of the hardest and biggest problems in finance (enabling credit access to the unbanked), and we have the technology in place to solve this. Secondly, we have an unmatched global presence and have already disbursed over $2B in credit and have positively impacted the lives of more than 6 million customers who use Tala loans.
I think the main factors that attract investors to Tala is that we’re tackling one of the hardest and biggest problems in finance (enabling credit access to the unbanked), and we have the technology in place to solve this. Secondly, we have an unmatched global presence and have already disbursed over $2B in credit and have positively impacted the lives of more than 6 million customers who use Tala loans.
What are the milestones you plan to achieve in the next six months?
With this recent investment, we’ll be accelerating the rollout of new financial account experiences, giving customers fresh tools to borrow, save and manage their money. In addition to payments and savings, the evolved account will offer an expanded range of personalized credit options, including longer-term loans and credit that can be configured to match customers’ income cycles. We’ll also be growing a world-class team across Kenya, the Philippines, Mexico, India, and the United States. We’re also extremely excited, in partnership with the Stellar network, to use this funding to develop the first mass-market crypto product for emerging markets, advancing a core promise of digital currency ecosystems by making more affordable and equitable financial tools available to populations that can benefit the most from the crypto economy.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
I would say stay focused on your mission and vision and showcase the positive impact that your company has made to the investors or your stakeholders because that’s what matters!
What’s your favorite outdoor activity in LA?
I have lived and worked in Santa Monica for over a decade now, and I love walking or running around town and taking in the natural beauty – whether at the beach, in the mountains, or en route to my favorite coffee shop. Being outside often helps me find clarity and creativity.
