Valor Capital Group
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Eco raises $26M in a16z-led round to scale its digital cryptocurrency platform
Eco, which has built out a digital global cryptocurrency platform, announced Friday that it has raised $26 million in a funding round led by a16z Crypto.
Founded in 2018, the SF-based startup’s platform is designed to be used as a payment tool around the world for daily-use transactions. The company emphasizes that it’s “not a bank, checking account, or credit card.”
“We’re building something better than all of those combined,” it said in a blog post. The company’s mission has also been described as an effort to use cryptocurrency as a way “to marry savings and spending,” according to this CoinList article.
Eco users can earn up to 5% annually on their deposits and get 5% cash back when transacting with merchants such as Amazon, Uber and others. Next up: The company says it will give its users the ability to pay bills, pay friends and more “all from the same, single wallet.” That same wallet, it says, rewards people every time they spend or save.
After a “successful” alpha test with millions of dollars deposited, the company’s Eco App is now available to the public.
A slew of other VC firms participated in Eco’s latest financing, including Founders Fund, Activant Capital, Slow Ventures, Coinbase Ventures, Tribe Capital, Valor Capital Group and more than one hundred other funds and angels. Expa and Pantera Capital co-led the company’s $8.5 million funding round.
CoinList co-founder Andy Bromberg stepped down from his role last fall to head up Eco. The startup was originally called Beam before rebranding to Eco “thanks to involvement by founding advisor, Garrett Camp, who held the Eco brand,” according to Coindesk. Camp is an Uber co-founder and Expa is his venture fund.
For a16z Crypto, leading the round is in line with its mission.
In a blog post co-written by Katie Haun and Arianna Simpson, the firm outlined why it’s pumped about Eco and its plans.
“One of the challenges in any new industry — crypto being no exception — is building things that are not just cool for the sake of cool, but that manage to reach and delight a broad set of users,” they wrote. “Technology is at its best when it’s improving the lives of people in tangible, concrete ways…At a16z Crypto, we are constantly on the lookout for paths to get cryptocurrency into the hands of the next billion people. How do we think that will happen? By helping them achieve what they already want to do: spend, save, and make money — and by focusing users on tangible benefits, not on the underlying technology.”
Eco is not the only crypto platform offering rewards to users. Lolli gives users free bitcoin or cash when they shop at over 1,000 top stores.
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Credit startup Migo expands to Brazil on $20M raise and Africa growth
After growing its lending business in West Africa, emerging markets credit startup Migo is expanding to Brazil on a $20 million Series B funding round led by Valor Capital Group.
The San Franicso-based company — previously branded Mines.io — provides AI-driven products to large firms so those companies can extend credit to underbanked consumers in viable ways.
That generally means making lending services to low-income populations in emerging markets profitable for big corporates, where they previously were not.
Founded in 2013, Migo launched in Nigeria, where the startup now counts fintech unicorn Interswitch and Africa’s largest telecom, MTN, among its clients.
Offering its branded products through partner channels, Migo has originated more than 3 million loans to over 1 million customers in Nigeria since 2017, according to company stats.
“The global social inequality challenge is driven by a lack of access to credit. If you look at the middle class in developed countries, it is largely built on access to credit,” Migo founder and CEO Ekechi Nwokah told TechCrunch.
“What we are trying to do is to make prosperity available to all by reinventing the way people access and use credit,” he explained.
Migo does this through its cloud-based, data-driven platform to help banks, companies and telcos make credit decisions around populations they previously may have bypassed.
These entities integrate Migo’s API into their apps to offer these overlooked market segments digital accounts and lines of credit, Nwokah explained.
“Many people are trying to do this with small micro-loans. That’s the first place you understand risk, but we’re developing into point of sale solutions,” he said.
Migo’s client consumers can access their credit lines and make payments by entering a merchant phone number on their phone (via USSD) and then clicking on “Pay with Migo.” Migo can also be set up for use with QR codes, according to Nwokah.
He believes structural factors in frontier and emerging markets make it difficult for large institutions to serve people without traditional credit profiles.
“What makes it hard for the banks is its just too expensive,” he said of establishing the infrastructure, technology and staff to serve these market segments.
Nwokah sees similarities in unbanked and underbanked populations across the world, including Brazil and African countries such as Nigeria.
“Statistically, the number of people without credit in Nigeria is about 90 million people and its about 100 million adults that don’t have access to credit in Brazil. The countries are roughly the same size and the problem is roughly the same,” he said.
On clients in Brazil, Migo has a number of deals in the pipeline — according to Nwokah — and has signed a deal with a big-name partner in the South American country of 210 million, but could not yet disclose which one.
Migo generates revenue through interest and fees on its products. With lead investor Valor Capital Group, Velocity Capital and The Rise Fund joined the startup’s $20 million Series B.
Increasingly, Africa — with its large share of the world’s unbanked — and Nigeria — home to the continent’s largest economy and population — have become proving grounds for startups looking to create scalable emerging market finance solutions.
Migo could become a pioneer of sorts by shaping a fintech credit product in Africa with application in frontier, emerging and developed markets.
“We could actually take this to the U.S. We’ve had discussions with several partners about bringing the technology to the U.S. and Europe,” said founder Ekechi Nwokah. In the near-term, though, Migo is more likely to expand to Asia, he said.
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