Online reputation and financial services startup Lenddo has raised an $8 million Series A Round from institutional investors Accel Partners, Blumberg Capital, Omidyar Network, iNovia Capital, and Metamorphic Ventures, as well as angel investors such as Geoff Judge, David Kidder, Scott Heiferman, and Barry Silbert. The startup plans to take that funding and help make loans available to customers who normally wouldn’t have access to them.
Lenddo’s mission is to help consumers in emerging markets develop creditworthiness and gain access to financial services, using online activity as a way to judge their reliability in paying back loans. The startup is already active in markets like the Philippines and Colombia, where it uses activity on social networks like Facebook, LinkedIn, and Twitter to judge their online reputations and provide capital that otherwise wouldn’t be available to them.
Lenddo makes 3-, 6-, and 12-month loans in the two markets it operates in, with the average repayment time currently at about 9.5 months. The startup aims to provide loans with the lowest interest rates available, CEO Jeff Stewart told me by phone, although for many that apply, Lenddo is the only real option available to them. Loan amount are typically about a month’s pay, which is around $400 in the Philippines and $800 in Colombia, according to Stewart.
So far, the program appears to be working, with Lenddo’s repayment rate falling roughly in line with other traditional microfinance systems, a rate that is typically above 95 percent. With that in mind, Lenddo has secured funding to hire more engineers and expand into other markets. But Stewart was mum on details of where it plans to expand: The company has members in 35 countries currently, so it plans to let its community decide where its next office will be.