Successful CMOs achieve growth by leveraging technology. Join us for GrowthBeat Summit on June 1-2 in Boston
, where we'll discuss how to merge creativity with technology to drive growth. Space is limited. Request your personal invitation here
Lenddo, which helps people build credit with small loans and a social-based Klout-like scoring system, raised an $8 million first round of funding Tuesday.
The brains behind Lenddo, co-founders Jeff Stewart and Richard Eldridge and chief scientist Dr. Naveen Agnihotri, think a person’s social graph can be a better indicator of trustworthiness than a credit score. Anyone who’s ever tried to get a loan or credit card without prior credit knows it’s a circular problem, one that is infinitely more difficult in emerging economies. Lenddo helps individuals in these countries break out of the cycle with small loans up to one month’s pay.
The company takes the wealth of data from your many social networks (including Facebook, LinkedIn, Twitter), looks at the people in your Lenddo Trusted Network (family, friends, co-workers), verifies you have a full-time job, and uses predictive algorithms to confirm your identity and calculate if you are a risk. There are three types of algorithms it uses: Bayesian (pattern matching), validators (verifying your identity and the information you’ve given), homophily (you’re likely to associate with people similar to you).
“It turns out, who is willing to endorse you is a powerful indicator of your trustworthiness,” a Lendoo spokesperson told us in an email. “As more people pay back, the network grows, and the borrowing capacity of the community grows.”
Currently, Lenddo only offers loans in the Philippines and Colombia, though it has tens of thousands of members in over 35 countries. The company won’t say how many loans or how much cash it has given out to date, but the average loan is $400 the Philippines and near $800 in Columbia, and the total amount is growing at close to one percent a day. The loans are most frequently used for education, but can also be put towards health care or repairs after a natural disaster, such as the recent devastating floods in the Philippines.
The company plans to use this $8 million round of funding to hire more engineers, ramp up growth, and eventually expand into other emerging markets, a process it says will be driven by its members.
Started in early 2011, Lenddo has employees in Manila, Bogotá, and New York City. Accel Partners, Blumberg Capital, Omidyar Network, iNovia Capital and Metamorphic Ventures participated in this round of funding, as did angel investors Geoff Judge, David Kidder, Scott Heiferman, and Barry Silbert.
VentureBeat’s VB Insight team is studying marketing analytics...
Chime in here, and we’ll share the results