Branch International, a San Francisco-based fintech startup which makes small personal loans in emerging markets, has announced it has partnered with Visa and raised $170m in its latest funding round. It will use the capital and leverage the partnership to offer clients primarily based in Africa, as well as South-Asia and Latin America, virtual, prepaid debit cards.
Branch's loans to individuals in these markets start at $2, and it uses algorithms to determine credit worthiness, build credit profiles and offer liquidity via mobile phones.
The $170m funding round was led by Foundation Capital and Visa and will be used to help Branch expand internationally, potentially entering Brazil and Indonesia, according to Branch co-founder and chief executive Matt Flannery. However, Flannery revealed that most of the funding would be in Africa, stating that it would "use [the money] to deepen existing business in Africa", before launching high-yield savings accounts in Africa later this year.
Within the past year Branch has launched in Mexico and India, but it is its presence in Kenya, Tanzania and Nigeria – the latter being Africa's most populous country with 190 million people – that will be expected to generate around 70% of its $100m in revenue for 2019. Africa has been experiencing an emergence of 'digital banks' in recent years, which has driven a fintech revolution that saw 50% of the estimated $1.1bn in funding African startups raised in 2018 going to the fintech sector, according to Partech.
Founded in 2015, Branch began operations in Kenya and today has more than three million customers, having since disbursed a total of more than $350m in loans. It is currently one of the most downloaded fintech apps in the crowded African market.