Credit startup Migo expands to Brazil on $20M raise and Africa growth
After rising its lending enterprise in West Africa, rising markets credit score startup Migo is increasing to Brazil on a $20 million Series B funding spherical led by Valor Capital Group.
The San Franicso-based firm — beforehand branded Mines.io — offers AI-driven merchandise to massive corporations so these firms can lengthen credit score to underbanked customers in viable methods.
That typically means making lending companies to low-income populations in rising markets worthwhile for large corporates, the place they beforehand weren’t.
Founded in 2013, Migo launched in Nigeria, the place the startup now counts fintech unicorn Interswitch and Africa’s largest telecom, MTN, amongst its shoppers.
Offering its branded merchandise by way of companion channels, Migo has originated greater than three million loans to over 1 million prospects in Nigeria since 2017, in accordance to firm stats.
“The global social inequality challenge is driven by a lack of access to credit. If you look at the middle class in developed countries, it is largely built on access to credit,” Migo founder and CEO Ekechi Nwokah instructed TechCrunch.
“What we are trying to do is to make prosperity available to all by reinventing the way people access and use credit,” he defined.
Migo does this by way of its cloud-based, data-driven platform to assist banks, firms and telcos make credit score choices round populations they beforehand might have bypassed.
These entities combine Migo’s API into their apps to provide these ignored market segments digital accounts and traces of credit score, Nwokah defined.
“Many people are trying to do this with small micro-loans. That’s the first place you understand risk, but we’re developing into point of sale solutions,” he mentioned.
Migo’s consumer customers can entry their credit score traces and make funds by coming into a service provider telephone quantity on their telephone (through USSD) and then clicking on “Pay with Migo.” Migo can be arrange to be used with QR codes, in accordance to Nwokah.
He believes structural components in frontier and rising markets make it tough for big establishments to serve individuals with out conventional credit score profiles.
“What makes it hard for the banks is its just too expensive,” he mentioned of building the infrastructure, expertise and workers to serve these market segments.
Nwokah sees similarities in unbanked and underbanked populations internationally, together with Brazil and African nations comparable to Nigeria.
“Statistically, the number of people without credit in Nigeria is about 90 million people and its about 100 million adults that don’t have access to credit in Brazil. The countries are roughly the same size and the problem is roughly the same,” he mentioned.
On shoppers in Brazil, Migo has various offers within the pipeline — in accordance to Nwokah — and has signed a cope with a big-name companion within the South American nation of 210 million, however couldn’t but disclose which one.
Migo generates income by way of curiosity and charges on its merchandise. With lead investor Valor Capital Group, Velocity Capital and The Rise Fund joined the startup’s $20 million Series B.
Increasingly, Africa — with its massive share of the world’s unbanked — and Nigeria — dwelling to the continent’s largest economic system and inhabitants — have grow to be proving grounds for startups wanting to create scalable rising market finance options.
Migo might grow to be a pioneer of kinds by shaping a fintech credit score product in Africa with utility in frontier, rising and developed markets.
“We could actually take this to the U.S. We’ve had discussions with several partners about bringing the technology to the U.S. and Europe,” mentioned founder Ekechi Nwokah. In the near-term, although, Migo is extra doubtless to increase to Asia, he mentioned.