Tech Startup Series: Tala
During the US-Africa Business Forum, we’re interviewing leaders of tech startups featured in the Sandbox about their experience with creating and growing a business in Africa. The Sandbox at the US-Africa Business Forum features a curated selection of young technology companies operating in Africa.
Tala
Santa Monica, United States
Operating in Kenya, Tanzania and the Philippines, Tala works in emerging markets to help anyone with a cell phone build a financial identity. Through its mobile app, Tala connects more than 10,000 data points per customer to create an instant credit score, deliver customized financial services and disburse loans directly to a customer’s mobile phone. Tala is currently expanding to West Africa, Latin America and Southeast Asia.
Founder: Shivani Siroya
What was your “a-ha” moment that led you to create this business/product?
After meeting with thousands of small and microbusiness owners in India and Africa and becoming essentially a “walking Quickbooks” for their lives, I learned two things: first, that the main thing holding this population back was access to capital, and second, that the missing piece was data. Many people were leading creditworthy lives, but they just didn’t have the paper trails or financial records to prove it. I knew no bank could reasonably do what I had done: spending months at a time with a single business owner to study their lifestyle and assess their risk. But I saw that the same kind of data that I gathered in my research was being captured frictionlessly, and instantly on smartphones. That was the kernel of inspiration that led me to develop our first credit scoring and lending app, now called Tala.
What would you tell investors outside of Africa about building and operating a startup in Africa?
One of the biggest challenges is a lack of awareness about the business growth and tech innovation that’s already happening in Africa. This is all starting to change for the better, but on the whole, my peers and I still spend a lot of time explaining the explosive growth of smartphones and mobile money in these markets, and how that’s already unlocking so much economic potential. We’re constantly undoing the perception that Africa is a continent that depends on aid and trying to show that it is, increasingly, a place to do business. And we have to do all this before we even get around to explaining our product.
What has been your experience when it comes to raising funds? How do you articulate the opportunity to investors?
We’ve been lucky to have a great team of investors who share our belief that technology can radically expand financial access. The opportunity is enormous: The number of underbanked and unscored people globally is between 2 and 2.5 billion, and the credit gap is over $3 trillion. And because we’re nimble and can scale quickly, we have the ability to capture a large portion of this market. We’re also in a space where the social returns are as exciting as the financial ones. Our product unlocks a world of untapped economic potential by putting the underbanked on an even playing field with the banked and creating financial systems that are more open and more inclusive.
What are your expansion plans? Will we see you in other African or international markets in the coming year?
We’re moving quickly into new markets that have high rates of smartphone and mobile money penetration combined with a big unmet need for credit. In addition to Kenya, where we first launched, we’re already operational in the Philippines and plan to launch in more countries in Southeast Asia, Latin America and Sub-Saharan Africa over the next year. In addition to expanding globally, we also want to expand our product offerings in the markets where we’ve had success and help people access other financial services, that can advance their lives and give them more choice and control, such as insurance.
Any advice for other emerging entrepreneurs in sub-Saharan Africa or the United States?
I always say trust your purpose and do your research. The research may lead you down different paths or give you a whole new way of solving a problem, but as long as you don’t lose sight of your purpose, you’ll keep moving forward. Our purpose is to give people more choice and control over their financial lives. Our research is a constant stream of customer feedback. We know it’s working when we hear directly from people that they’re expanding their businesses, creating jobs and advancing their lives.
