PayJoy, a startup that has developed smartphone technology to facilitate access to credit in emerging markets, has raised $20 million from venture capital firm Greylock Partners, the company said on Thursday.
Union Square Ventures, EchoVC and Core Innovation Capital also participated in the round, PayJoy said. The San Francisco-based startup said it will use the funding to expand, secure more partners and develop new technologies.
PayJoy enables consumers with no bank accounts or formal credit history to purchase smartphones on installment payments and get cash loans. It does so by turning the smartphone into collateral through software that locks the phone when payments have not been made.
It believes that making smartphones more affordable can be a stepping stone toward increasing financial inclusion since more financial services are now being provided digitally.
“We’re building technology to help people carve a path into the financial system,” Mark Heynen, the company’s co-founder and chief business officer, said in an interview.
Globally, 1.7 billion adults do not have a bank account, but two-thirds of them own a mobile phone which could help them access financial services, the World Bank said in a 2018 report.
Josh McFarland, a partner at Greylock, said he believes PayJoy’s technology and distribution network could help emerging markets unlock some of their economic growth.
“Credit is a major piece of the infrastructure needed to help the global middle class better their quality of life,” McFarland said.
PayJoy, which employs around 90 people globally, operates in more than 10 countries including Mexico, India, Indonesia, Nigeria, Kenya and Guatemala. In most markets the startup does not provide financing itself, but partners with retailers and credit providers. Partners include Telefonica, Vodacom and Orange SA.
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