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May 26, 2019
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Partnering with Visa, emerging market lender Branch International raises $170 million

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The San Francisco-based startup Branch International, which makes small personal loans in emerging markets, has raised $170 million and announced a partnership with Visa to offer virtual, pre-paid debit cards to Branch client networks in Africa, South-Asia and Latin America. 

Branch — which has 150 employees in San Francisco, Lagos, Nairobi, Mexico City and Mumbai — makes loans starting at $2 to individuals in emerging and frontier markets. The company also uses an algorithmic model to determine credit worthiness, build credit profiles and offer liquidity via mobile phones.

“We’ll use [the money] to deepen existing business in Africa. Later this year we’ll announce high-yield savings accounts…in Africa,” says Branch co-founder and chief executive Matt Flannery.

The $170 million round from Foundation Capital and its new debit card partner, Visa, will support Branch’s international expansion, which could include Brazil and Indonesia, according to Flannery. Branch launched in Mexico and India within the last year. In Africa, it offers its services in Kenya, Nigeria and Tanzania.

A potential Branch customer

The Branch-Visa partnership will allow individuals to obtain virtual Visa accounts with which to create accounts on Branch’s app. This gives Branch larger reach in countries such as Nigeria — Africa’s most populous country with 190 million people — where cards have factored more prominently than mobile money in connecting unbanked and underbanked populations to finance.

Founded in 2015, Branch started operating in Kenya, where mobile money payment products such as Safaricom’s M-Pesa (which does not require a card or bank account to use) have scaled significantly. M-Pesa now has 25 million users, according to sector stats released by the Communications Authority of Kenya. Branch has more than 3 million customers and has processed 13 million loans and disbursed more than $350 million, according to company stats.

Branch has one of the most downloaded fintech apps in Africa, per Google Play app numbers combined for Nigeria and Kenya, according to Flannery.

Already profitable, Branch International expects to reach $100 million in revenues this year, with roughly 70 percent of that generated in Africa, according to Flannery.

In addition to Visa and Foundation Capital, the $170 Series C round included participation from Branch’s existing investors Andreessen Horowitz, Trinity Ventures, Formation 8, the IFC, CreditEase and Victory Park, while adding new investors Greenspring, Foxhaven and B Capital.

Branch last raised $70 million in 2018. The company’s overall VC haul and $100 million revenue peg register as pretty big numbers for a startup focused primarily on Africa. Pan-African e-commerce startup Jumia, which also announced its NYSE IPO last month, generated $140 million in revenue (without profitability) in 2018.

Startups building financial technologies for Africa’s 1.2 billion population have gained the attention of investors. As a sector, fintech (or financial inclusion) attracted 50 percent of the estimated $1.1 billion funding to African startups in 2018, according to Partech.

Branch’s recent round and plans to add countries internationally also tracks a trend of fintech-related products growing in Africa, then expanding outward. This includes M-Pesa, which generated big numbers in Kenya before operating in 10 countries around the world. Nigerian payments startup Paga announced its pending expansion in Asia and Mexico late last year. And payment services such as Kenya’s SimbaPay have also connected to global networks like China’s WeChat.

Boundless gets $7.8M to help immigrants navigate the convoluted green card process

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Two years ago, former Amazon product manager Xiao Wang stood on the stage at TechCrunch Disrupt San Francisco and made the case for a platform meant to help couples apply for marriage green cards, a complex process made worse by bureaucracy and red tape.

Called Boundless, the startup had spun out of Seattle startup studio Pioneer Square Labs and raised a $3.5 million seed round. Now, Foundry Group’s Brad Feld has led a $7.8 million Series A in the startup, with participation from existing investors Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders’ Co-Op.

“Families have really only had two choices, they could spend weeks or months trying to figure this out on their own, or they can spend thousands and thousands of dollars on an immigration attorney,” Wang, Boundless co-founder and chief executive officer, told TechCrunch. “What we are trying to do is basically give everyone access to the information, the tools and the support that was previously only available to those that could afford high-priced attorneys.”

Boundless charges $750 for its online green card application support services, which includes ensuring families correctly complete applications and have access to an immigration lawyer to review those applications. The fee comes at a major discount to the costs of an immigration lawyer and streamlines a process that can be delayed months when errors are made. The startup also offers a recently launched $395 naturalization product meant to assist eligible green card holders with their U.S. citizenship applications.

Wang founded Boundless in 2017 after helping build Amazon Go, the e-commerce giant’s line of cashierless convenience stores. Wang is an immigrant, having relocated to the U.S. from China when he was a child.

“We spent almost five months of rent money on an immigration attorney because the stakes were so high and we only had one shot,” Wang said. “We wanted to make sure we were doing it right. This is a story that is echoed by millions of families every year; this is such an important part of them starting a new life in a new country.”

Wang, after three years at Amazon, realized he could use his technology background and data prowess to build an information platform supportive of these millions of families.

“This is exactly what tech and data is meant to do,” he said. “I believe there is a moral obligation for tech to be used in meaningfully improving people’s lives.”

Boundless plans to use this investment to expand its team and product offerings, as well as build out its content library, which Wang said is rapidly becoming the go-to place for immigrants navigating the legal labyrinth that is the U.S. green card and citizenship process. Its resources page, which includes straightforward guides, a number of forms and more, counts 300,000 unique visitors per month.

“We hold their hand through the entire process,” Wang said. “We want to be the single source of information and tools for all family-based immigration.”

Wang and his team also hope to shine a brighter light on immigration policy. In late 2018, as part of its effort to be louder advocates for immigrants, Boundless, alongside Warby Parker, Foursquare, Foundation Capital and more, published an open letter to the U.S. Department of Homeland Security opposing its proposed “public charge” immigration regulation, which would allow for non-citizens who are in the country legally to be denied a visa or a green card if they have a medical condition, financial liabilities and other disqualifiers.

“The stakes for making sure your application is correct have never been higher; the government has far more leeway to be able to deny applications,” Wang said. “While we can’t speed up the government processing times, we can make meaningful improvements to helping families gather all the materials they need to send in the right information.”

Two Facebook and Google geniuses are combining search and AI to transform HR

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Two former product wizards from Facebook and Google are combining Silicon Valley’s buzziest buzz words –search, artificial intelligence, and big data — into a new technology service aimed at solving nothing less than the problem of how to provide professional meaning in the modern world.

Founded by chief executive Ashutosh Garg, a former search and personalization expert at Google and IBM research, and chief technology officer Varun Kacholia, who led the ranking team at Google and YouTube search and the News Feed team at Facebook, Eightfold.ai boasts an executive team that has a combined eighty patents and over 6,000 citations for their research.

The two men have come together (in perhaps the most Silicon Valley fashion) to bring the analytical rigor that their former employers are famous for to the question of how best to help employees find fulfillment in the workforce.

“Employment is the backbone of society and it is a hard problem,” to match the right person with the right role, says Garg. “People pitch recruiting as a transaction… [but] to build a holistic platform is to build a company that fundamentally solves this problem,” of making work the most meaningful to the most people, he says.

 

It’s a big goal and it’s backed $24 million in funding provided by some big time investors — Lightspeed Ventures and Foundation Capital .

The company’s executives say they want to wring all of the biases out of recruiting, hiring, professional development and advancement by creating a picture of an ideal workforce based on publicly available data collected from around the world. That data can be parsed and analyzed to create an almost Platonic ideal of any business in any industry.

That image of an ideal business is then overlaid on a company’s actual workforce to see how best to advance specific candidates and hire for roles that need to be filled to bring a business closer in line with its ideal.

“We have crawled the web for millions of profiles… including data from wikipedia,” says Garg. “From there we have gotten data round how people have moved in organizations. We use all of this data to see who has performed well in an organization or not. Now what we do… we build models over this data to see who is capable of doing what.”

There are two important functions at play, according to Garg. The first is developing a talent network of a business — “the talent graph of a company”, he calls it. “On top of that we map how people have gone from one function to another in their career.”

Using those tools, Garg says Eightfold.ai’s services can predict the best path for each employee to reach their full potential.

 

The company takes its name from Buddhism’s eightfold path to enlightenment, and while I’m not sure what the Buddha would say about the conflation of professional development with spiritual growth, Garg believes that he’s on the right track.

“Every individual with the right capability and potential placed in the right role is meaningful progress for us,” says Garg. 

Eightfold.ai already counts over 100 customers using its tools across different industries. It’s software has processed over 20 million applications to-date, and increased response rates among its customers by 700 percent compared to the industry average all while reducing screening costs and time by 90 percent, according to a statement.

“Eightfold.ai has an incredible opportunity to help people reach their full potential in their careers while empowering the workforces of the future,” said Peter Nieh, a partner at Lightspeed Ventures in a statement. “Ashutosh and Varun are bringing to talent management the transformative artificial intelligence and data science capability that they brought to Google, YouTube and Facebook.  We backed Ashutosh previously when he co-founded BloomReach and look forward to partnering with him again.”

The application of big data and algorithmically automated decision making to workforce development is a perfect example of how Silicon Valley approaches any number of problems — and with even the best intentions, it’s worth noting that these tools are only as good as the developers who make them.

Indeed, Kacholia and Garg’s previous companies have been accused on relying too heavily on technology to solve what are essentially human problems.

The proliferation of propaganda, politically-minded meddling by foreign governments in domestic campaigns, and the promotion of hate speech online has been abetted in many cases by the faith technology companies like Google and Facebook have placed in the tools they’ve developed to ensure that their information and networking platforms function properly (spoiler alert: they’re not).

And the application of these tools to work — and workforce development — is noble, but should also be met with a degree of skepticism.

As an MIT Technology Review article noted from last year,

Algorithmic bias is shaping up to be a major societal issue at a critical moment in the evolution of machine learning and AI. If the bias lurking inside the algorithms that make ever-more-important decisions goes unrecognized and unchecked, it could have serious negative consequences, especially for poorer communities and minorities. The eventual outcry might also stymie the progress of an incredibly useful technology (see “Inspecting Algorithms for Bias”).

Algorithms that may conceal hidden biases are already routinely used to make vital financial and legal decisions. Proprietary algorithms are used to decide, for instance, who gets a job interview, who gets granted parole, and who gets a loan.

“Many of the biases people have in recruiting stem from the limited data people have seen,” Garg responded to me in an email. “With data intelligence we provide recruiters and hiring managers powerful insights around person-job fit that allows teams to go beyond the few skills or companies they might know of, dramatically increasing their pool of qualified candidates. Our diversity product further allows removal of any potential human bias via blind screening. We are fully compliant with EEOC and do not use age, sex, race, religion, disability, etc in assessing fit of candidates to roles in enterprises.”

Making personnel decisions less personal by removing human bias from the process is laudable, but only if the decision-making systems are, themselves, untainted by those biases. In this day and age, that’s no guarantee.

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