Branch, a startup promising to bring lending to people in developing nations by using data stored on their mobile phones to make credit decisions, has raised $9.2 million in a Series A funding round led by Andreessen Horowitz.
Led by Kiva co-founder Matt Flannery, Branch is attempting to bypass traditional credit rating tools to bring lending to the billions of people who can't access traditional financial services.
Based in San Francisco, Branch also has a team of 30 in Kenya, where it has already launched. To become a member, users download the free Branch app from Google Play and fill out a short, 30 second application, giving consent to the startup to trawl their handsets.
Branch's machine learning algorithms then process thousands of data points - from contact lists, social network data, GPS data, SMS logs - to assess credit profiles and create tailored loan products.
Once a decision has been made, loans are sent out to M-Pesa mobile money accounts within minutes. The loans are repaid through the mobile money account, helping to build credit history that unlocks larger loans and better rates.
The new funding will be used to expand into new countries, beginning immediately with Tanzania.
Alex Rampell, general partner at Andreessen Horowitz, says: "The combination of smartphones, digital money, and machine learning offers an opportunity to leapfrog old-fashioned credit infrastructure, and that’s precisely what Branch is doing. It’s like a combination of proprietary credit bureau and bank all in one, all wrapped into an Android app that anyone can download."