Migo (formerly Mines.io), is probably best known in Nigeria as the lending platform, Kwikmoney (formerly Kwikcash).
Since launching in 2013, Migo has focused on serving underbanked customers who are not typically covered by credit bureaus.
Through its lending platform, as well as partnerships with companies like banks, telecommunications operators, and merchants who integrate Migo in their apps, the credit startup has underwritten more than 7 million customers to date; most of whom were previously neglected by formal credit systems.
Since Kunle Olukotun and Ekechi Nwokah (both with strong backgrounds in artificial intelligence and data analytics) linked up to bring to life a cloud-based platform that would enable companies to offer credit to their customers while augmenting traditional bank and payment card infrastructure, the San Franciso-headquartered startup has grown in leaps and bounds in Nigeria which has so far proved a prime testbed.
In Nigeria, Migo now enables some of the largest retail enterprises — from mobile operators like 9mobile and MTN to payment companies, Interswitch and Flutterwave, to banks like Bank of Industry and Fidelity Bank.
In a market like Nigeria where an estimated 90 million have no access to credit, there exists a massive area of untapped growth for emerging market banking ecosystems. Access to credit has also been identified as fundamental to bridging economic gaps. And Migo is acting as a veritable medium for credit access.
Following last year’s USD 13 Mn Series-A raise, Migo announced a USD 20 Mn Series-B round yesterday, together with a change of name that may have been inspired by a decision to pull off a Nigeria in South America. After making so many friends in Nigeria, it appears Migo wants some more amigos in Brazil.
Nigeria has been a great testing ground for scaling the solutions and with these funds, Migo is now rolling out its solutions in Brazil, delivering the same benefits Nigerians have enjoyed for so long.
Adia Sowho, VP of Growth for Migo, says the move for Brazil is inspired by similarities between both markets.
“There are so many similarities between Nigeria and Brazil. In Nigeria, there are around 90 million adults without access to credit. In Brazil, that number is roughly 100 million,” she says.
“The problem in Brazil is of a similar size to the Nigerian version of the problem which we are making good headway with and we hope to achieve the same in Brazil.”
Sowho adds: “Similarly, both countries have the same challenges issuing credit to the populace. They both have similar challenges in the area of credit infrastructure that can actually cover the entire population. So it’s based on the similarity of the problem that we have gone from Nigeria to Brazil.”
To give Migo a strong footing in Brazil, partnerships have already been struck with various institutions in the South American nation which would help bring Migo’s credit offering to its target customers — much like what is being done in Nigeria. Migo’s newest partners in Brazil will be revealed in due course.
Sowho also describes partnerships as a key element of the company’s ethos. By partnering with institutions that have an already-established customer base and layering credit onto the existing services of those institutions — either as a new service or as a supplement to an existing service — Migo is able to reach a large number of customers.
“Migo serves people through partner institutions,” Sowho tells WeeTracker. “We’ve chosen to go the route of partnerships because we’ve discovered that a lot of these institutions have spent a significant amount of time acquiring these customers locally.”
“So it’s extremely beneficial and it enriches the ecosystem if we approach institutions that have already acquired customers and layer our credit offering onto their services.”
Migo offers a simple API so its partners can offer co-branded credit services in their own apps and websites, increasing customer engagement and serving customer segments they were not previously able to serve.
The platform is particularly attractive for merchants and payment gateways since it can grow merchant revenue due to increased customer purchasing power and transaction completion rate.
Like most other lending platforms, Migo makes revenue from interests on the principal lent out and it shares these revenues with partners. Also, the business has to deal with loan defaults as is common with lending, though the VP of Growth maintains that “default rates are quite manageable.”
While specific numbers on revenues and profitability are not public knowledge at the moment, Sowho points to the number of loans disbursed through the years and recent VC/PE interest as evidence of the strength of the business model and indication that “some profitability” is on the horizon.
“A typical marker of a company reaching Series-B is that some profitability has needs to have been demonstrated,” says Sowho.
“Also, a look at our group of investors who are more traditional VCs and PEs gives a sense of the strength of the business model which was observed before the investments came in.”
She adds: “At Migo, we don’t believe that the bottom of the pyramid is devoid of profits. We believe that there are definitely opportunities for value exchange between our company and the under-served, underbanked, and unbanked users.”
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