FairMoney, a Paris-based fintech startup, has closed a $10 million-euro Series A round of investment led by Flourish, a venture of The Omidyar Group, the partners of DST Global, and existing seed investors Newfund, Speedinvest, and Le Studio VC to reshape mobile banking in Nigeria and other countries.
Launched in 2017, FairMoney, which started as a mobile app that uses alternative smartphone data to underwrite microcredit in Nigeria, has more than 200,000 customers with a majority using the platform to finance their small business needs.
Alongside the investment round, FairMoney has also introduced the in-app payment function to its users, which allows them to top up their phone subscriptions, buy mobile data, pay electricity or internet bills, among others, already facilitating more than 400 payments daily. Other features, such as digital wallet and saving account are scheduled to launch soon.
Commenting on the funding, Chief Executive of FairMoney, Laurin Hainy, said “our vision is to build a holistic financial platform for underserved customers in emerging markets. We want to do that by offering an easy-to-use product to our customers and become a financial one-stop-shop for them.
“We started with credit for small business owners and individuals, and we are expanding our services rapidly. Think digital bank for emerging market consumers.”
According to the World Bank, more than two 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.
Principal at Flourish and FairMoney’s new board member, Ameya Upadhyay, said “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.