Branch raises USD 9.6M from Andreessen Horowitz, Khosla and Formation 8 in Series A

Mobile-based financial services company Branch announced Thursday last week it had raised a Series A equity funding round of USD 9.6 million (KES 1B), as it positions itself for further growth and expansion into new markets. The funding will allow for the expansion of the startup’s operations, hiring talent in Kenya as well as expansion across East Africa in 2016.
The round was led by Andreessen Horowitz (a16z) , a prestigious US-based VC firm that has previously backed top Facebook and Airbnb. Alex Rampell, an Andreessen Horowitz partner said: “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”. Seed investors Khosla Impact and Formation 8 also participated in the Series A round.
Last week, the company disbursed its first loan in Tanzania, marking an important milestone towards its goal to expand to several African countries and disburse 1 million additional loans to its customers. The company’s app already has 150,000 people in Kenya are using the app. Each customer has taken an average of 3 loans, ranging from KES 250 (USD 2.50) to KES 50,000 (USD 500). Loans are typically approved within minutes.
Branch launched its mobile app in May 2015. It uses advanced data science to calculate a credit score for its customers by analysing the information on their phone such as call and SMS history. 
“Our product is simple. Forget about bank queues and month-long processes. Branch is like a bank in your pocket, there for you at all times”, explained Daniel Szlapak, Africa Director. “The proprietary technology we have developed means that we are able to charge lower interest rates than our competition, and reward users who repay on time with lower fees, larger loan amounts and more flexible repayment terms as they continue to use the app.”