Lendable raises $6.5m series A round to launch its services in Tanzania, Rwanda
Lendable has raised USD 6.5 million in a Series A round of investment from KawiSafi Ventures, Omidyar Network, Fenway Summer Ventures and a number of prominent FinTech angel investors from the United States.
They included Larry Rosenberger, the former Fair Isaac Corporation (FICO) CEO. The funds will be used to scale operations, drive market expansion, and roll out new products. Lendable has launched the first technology-enabled deal platform designed specifically for alternative lenders in frontier markets. The Lendable platform enables these companies to raise scalable forms of off-balance sheet financing in weeks.
Lendable has so far completed five transactions, raising USD2.83 million for East African alternative lenders. With the scaling up of operations in Nairobi and New York, 2018 will see Lendable on track to complete ten transactions per quarter. The company will also be launching its services in Tanzania, Rwanda, and at least one other market while expanding its line of products.
Typically, Lendable transactions are a purchase of consumer or SME borrowing contracts secured by productive assets – payroll, SME, livestock, and a range of equipment including farm machinery, vehicles and home appliances. A portion of the alternative lenders’ loan book is purchased, which frees up capital for lenders to make more loans and grow exponentially. In just under 12 months, Lendable has helped four originators all at least double each of their loan books. So far, the largest portion of borrowing contracts have been secured by solar home systems. As such, Lendable is helping to accelerate the trend, where more micro-entrepreneurs and their families living off the grid, will harness cleaner, safer, more reliable solar energy.
Lendable has built Africa’s most advanced asset-backed finance software platform, Maestro, which assesses alternative lender financials, customer collections, and customer payment histories. It uses payment patterns and secondary data to predict future payments and to automatically price and monitor the financing facility. East Africa’s alternative lender market is experiencing high growth and is expected to reach US$15 billion by 2020.
Daniel Goldfarb, CEO and Co-Founder of Lendable, says: “Over the last year we have shown we can raise commercial capital for alternative lenders, deliver commercial returns to US investors, and help our alternative lending partners grow exponentially. We are excited to use this money to dramatically increase the scale of capital we are moving and continue to prove out this asset class.”
Amar Inamdar, Managing Director, KawiSafi Ventures says: “The lack of well-priced debt is holding back the growth of successful off-grid energy companies. Lendable is developing the unparalleled capability to de-risk debt and support alternative lenders in East Africa. This enables energy access for millions of poor and under-served customers throughout the region.”
Ameya Upadhyay, Principal at Omidyar Network, says: “Lendable is able to predict payment behaviour of micro-entrepreneurs, many of whom don’t have access to affordable credit. This enables Lendable to unlock capital for the creation of productive assets which drive greater economic productivity for millions of people and their families in frontier markets.”
Matt Perlman, Principal at Fenway Summer Ventures, says: “We’ve backed Lendable since its inception because we believe in their data-driven approach to enabling off-balance sheet financing solutions for alternative lenders in frontier markets. Lendable’s software, analytics and structuring capabilities are unparalleled in this space and they will be instrumental in catalyzing growth in these markets.”
