Micro-loan provider Tala has raised $110 million in Series D funding round to fuel its substantial expansion in the Indian Market.
The round was led by Softbank-backed RPS Ventures which was joined by GGV Capital, along with investors including Revolution Growth, Yahoo co-founder Jerry Yang, Alibaba co-founder Joseph Tsai’s Blue Pool Capital and PayPal Ventures.
According to a source close to the company, the current round values the company around $700 million, Fortune reported.
This round comes after the Santa Monica-based startup raised a $50 million Series C investment round led by Revolution Growth last year in addition to another $15 million in debt capital.
Tala is the brainchild of Shivani Siroya, who was working as an analyst with the UN population fund working with microfinance in Sub-Saharan Africa and Southeast Asia.
She launched InVenture Capital Corporation, a mobile technology and data science company working for financial inclusion for the underserved markets in 2011. It was later branded as Tala.
The company offers unsecured loans ranging from $10 to $500 via its mobile app for people without a credit score.
There are more than a billion people in the world without any bank accounts, financial identity or available credit scores. Hence, they don’t have access to credit or financial products.
Tala provides credit to this underserved section of the market by evaluating their creditworthiness through its android app. Customers give Tala access to their mobile data, which is then used by the company for spending/financial analysis on them.
Users can set up an account by answering a set of questions and then the application collects data points such as transactional data, internet usage, and communication patterns. It allows the company to rate users without a paper trail or financial records.
The company disburses loans using this rating, usually charging an interest rate between 5%-15% and a payback period of 30 days.
The company claims to have lent over $1 billion to more than 4 million customers in India, Philippines, Mexico, Kenya, and Tanzania.
It boasts a payback rate of around 92% and has a network of roughly 40,000 pickup points used by their customers to payback or cash their loans.