Flourish, a venture of The Omidyar Group, led the Series A investment round alongside existing investors
According to the World Bank, more than 2 billion people globally have limited access to financial services and working capital. Access to loans for this segment is extremely limited given that they do not have a credit score. FairMoney’s approach to underwriting credit is based on a proprietary algorithm that applies machine learning techniques to smartphone data. The average loans are 30 Euros and customers can grow their loan limits up to 400 Euros over time by showing good repayment habits.
“After backing digital banks in the US, UK, Latin America and South Asia, we are excited to support one of the first companies to bring this model to Africa. We believe that customers will ask a lot more of their banks–to be relevant, banks will have to move from service providers to become financial mentors for their customers,” said Ameya Upadhyay, principal at Flourish and FairMoney’s new board member. “That’s where we see a massive global opportunity for FairMoney, which combines a top-notch banking infrastructure with a culture of obsessive customer focus.”
For decades, incumbent banks have only lent to large enterprise clients and left a big part of the population underserved. New technologies have created the opportunity to include these consumers into the formal financial system for the first time. Use cases for the FairMoney loan product are diverse–more than 60 percent of customers use the loans as working capital to run small- and micro-businesses. The automatic underwriting process enables FairMoney to score clients and disburse funds within 5 minutes.
FairMoney was founded in 2017 by CEO Laurin Hainy, former CEO of Venture Builder and VC fund Le Studio VC, alongside CTO Matthieu Gendreau, ex-lead developer of PriceMatch and CPO Nicolas Berthozat.
Funds raised in this round will be used to scale the company’s engineering team in order to develop a fully-fledged mobile banking offering in Nigeria and beyond.