Silicon Valley-based venture capital fund Andreessen Horowitz has invested $9.6 million in Branch, a Kenyan startup that uses a Facebook-linked mobile app to extend microloans to entrepreneurs via a local mobile money platform.
The $4 billion venture capital fund, renowned for its investment in Facebook, Airbnb, Buzzfeed and Pinterest, did not disclose how much equity stake it will acquire in the Kenyan micro-lender.
Matt Flannery, Branch founder and CEO, said the Series A equity funding will allow the company to expand into the new markets , scale up its operations as well as hire new talent in the Kenyan market.
“Over the last few months we’ve been growing rapidly,”Flannery, a former founding member of Kiva.org said. “With this latest round of funding, we’re able to expand further to meet the huge demand for our credit product in Kenya and enter new markets.”
The capital injection will help grow Branch’s loan book nearly tenfold from the current $1 million, Business Daily reported.
The microlender made its first loan disbursement in Tanzania this week, a keep step in expanding to other African countries and increasing its loan customers to a million from the current 150,000 people using the platform in Kenya.
Each Branch customer has taken out three loans each on average, ranging from $2.50 to $500, which are normally approved quickly making the borrowing process smooth and stress-free for its customers.
The repayment periods for these loans range between three weeks to one year with the interest rates charged between six to 16 percent, Techweez reported.
Andreessen Horowitz is banking on the equity in Branch to help the financial technology firm scale operations in Kenya and grow its loan book, highlighting the growing popularity of mobile-based credit.
“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,” Alex Rampell, the partner Andreessen Horowitz who invested on behalf of the fund, told aptantech.
Branch previously raised $1.4 million in seed funding from two other Silicon Valley venture capital firms, Formation 8 and Khosla Impact.
Branch is currently available for download in the Google Play Store in Kenya and Tanzania
Credit: AFK Insider