Branch, a mobile lending app for the emerging markets has announced a $70 million Series B investment to expand its financial offerings to additional countries. Branch International which aims to offer world-class financial products in Kenya, Nigeria and Tanzania will use part of its Series B investment to increase its product offerings including savings and payments and fuel its launch into India.
According to a Mickinsey, digital finance has the potential to reach over 1.6 billion new retail customers in emerging economies and to increase the volume of loans extended to individuals and businesses by $2.1 trillion. The providers of these products stand to gain by access to potential new revenue streams and to increase their balance sheets by as much as $4.2 trillion, in aggregate.
And Branch is currently the top finance app in Africa with more 1 million downloads on its Google store app and the company is growing at 20% monthly and expects to disburse over $250 million in 2018.
The company charges 14% interest on a loan from as low as $2 – $500 at with a repayment period of up to 12 months.
According to the CEO, Matthew Flannery, Branch loses money on the $2 loan in order to drum up repeat business. New customers borrow from Branch 20 times on average in the first year after they’ve downloaded the app.
The investments led by Trinity Ventures with $20 million in equity also had participation by International Finance Corporation (IFC), Andreessen Horowitz and CreditEase Fintech Investment Fund with an additional $50 million in debt from Victory Park.
Anju Patwardhan, Managing Director of CreditEase Fintech Investment Fund and Trinity Ventures General Partner Schwark Satyavolu, who spearheaded the investment for the firm, will join the Branch board of directors.
“In America, financial services are well-established, and the smartphone market is mature. By contrast, millions of consumers in emerging markets lack access to basic financial offerings like credit. Meanwhile, smartphone adoption in those countries is accelerating at break-neck speed and because of the confluence of these two megatrends, the tremendous gap in financial service offerings and the rapid rise of the platform able to deliver them, and because of the team’s incredible bench of talent, I’m excited to invest in Branch and am bullish on its future.” said Trinity Ventures general partner Schwark Satyavolu.