How This Fintech Founder Succeeded By Taking The “First Risk”

Shivani Siroya had methodically built her Los Angeles-based small business lending platform Tala. The founder and CEO created a mobile platform for unbanked individuals—that is, those without a formal credit history—that analyzes the likelihood of repaying their loans, which range between $10 and $500. In 2013 and 2014, the business expanded to the whole of Kenya. But the customers were not satisfied.

Siroya had a realization: “I don’t think I’m having the impact that I want us to have,” she said Inc.’s What I Know podcast.

It was the start-up’s partnership with traditional banks that slowed down communication with and lending to customers – and the banks did not always take Tala’s advice to lend to existing customers again, says Siroya. They were similar problems she had faced early in her career, working in international microfinance. So Siroya decided that since her business model was based on trust, she and her investors had to be the ones willing to take on more risk. She made Tala not only the platform for lending, but also the bank.

“It was deciding to say, ‘OK, we’re doing this and sure it works, but are we really moving the needle?'” says Siroya. “It was deciding to take the first risk.”

Lending the company’s own equity directly to small business owners who used Tala’s Android smartphone app worked. Within a year, the company was ready to expand into new markets. But in doing so, it didn’t take the obvious or easy route.

“We didn’t want to just launch another country in East Africa, because when we think about taking the first risk, what do you do? You really need to prove that this can work globally,” says Siroya. “And so we wanted to choose a completely different continent. We wanted to choose a different culture. We wanted to think about a market that didn’t have the infrastructure that Kenya had.”

It followed up the launch in the Philippines with a launch of services in Mexico, and then India. Today it operates across the four countries, delving into deeper services, including banking, for its customers. Tala has 540 employees in the US and around the world, and has raised $360 million in venture capital.