San Francisco-based startup Fairbanc announces funding round from globally recognized investors . The AI-powered closed loop financing platform was able to increase sales of Unilever merchants by 35% in a recent roll-out.
QUICK FACTS FOR THE MEDIA:
- Launched in 2019, Fairbanc is a scalable, AI-powered closed loop financing platform for emerging market small- medium enterprises (SMEs) that offers Just-in-Time credit for micro-merchants to purchase inventory from selected suppliers, such as Unilever, via simple SMS without requiring any smartphone or digital literacy.
- Fairbanc uses machine learning and machine vision powered credit underwriting technology that helps select outlets with unmet demand capacity that credit can unlock
- Fairbanc initially tested its closed-loop credit and data analytics platform in Bangladesh, and recently completed a Phase-I roll-out with Unilever Indonesia through the Unilever Foundry program that resulted in 35% growth in sales for the participating outlets. 80% of the merchants are unbanked and over 70% are women operated.
- Fairbanc’s founding team includes many fintech veterans like the former CTO of Kiva, a San Francisco based microcredit platform that operates in 77 countries and disbursed $1.4B in microloans, and Thomas Schumacher who co-founded California based emerging market microloan giant Tala that recently closed a funding round at $800M valuation.
- Fairbanc is a Sharia compliant lender and signed a partnership with Indonesia’s largest Islamic organization Nahdlatul Ulama with 100M members
- Fairbanc also signed a partnership with one of the largest Indonesia conglomerate Sinarmas to extend credit through Sinarmas’s distributors to micro merchants that sells both Unilever and other FMCG products.
San Francisco, CA, April 1 2020 — San Francisco-based startup Fairbanc just received a funding round from 500 Startups and Indonesian billionaire Michael Sampoerna. The startup was launched in 2018 by Founder Mir Haque (A Wharton MBA who previously worked at McKinsey, Deutsche Bank, and Adobe). Fairbanc’s Chief Technology Officer Kevin O’Brien previously was the CTO of Kiva, a San Francisco based microcredit platform that operates in 77 countries and disbursed $1.4B in microloan. The founding team also includes Fairbanc’s current board member Thomas Schumacher who co-founded California based emerging market microloan giant Tala that recently closed a funding round at $800M valuation.
Fairbanc recently completed a Phase-I roll-out with Unilever Indonesia through the Unilever Foundry Program. What’s so Unique about Fairbanc is that the credit it offers the unbanked merchants to buy products from its large consumer brand partners is simply a one-time passcode sent via text messages to the merchant’s cell phone – a deft solution for the unbanked segment of the market that lags behind in smartphone ownership and digital literacy. Fairbanc also heavily relies on data science and machine learning in automating its credit scoring and risk monitoring. The startup also developed AI-powered product recognition capabilities in hopes of offering valuable competitive insights to its consumer brand partners.
By partnering up with large consumer brand companies and only offering productive loans to purchase high margin products like Unilever, Fairbanc expects to reduce loan default risks significantly while scaling quickly by leveraging the consumer brand’s large merchant network.
“The speed and size of the micro merchants transactions make it challenging for banks to service this segment, because their transactions tend to be small and largely not traced. We hope Fairbanc’s innovative technology integrated with FMCG supply chain will help address this challenge” says Khailee Ng, Managing Partner of 500 Startups.
“500 Startups usually prides itself as a Social Impact investor, and with our investment in Fairbanc, we see a great opportunity to offer financial access to the unbanked and women merchants across the entire Southeast Asia region over time,” Ng adds.
Fairbanc is a Shariah-compliant lender, and signed a partnership with Indonesia’s largest Islamic organization Nahdlatul Ulama with 100M members last year to offer Sharia financing to their member merchants.
“Fairbanc’s Shariah-compliant credit solution, has the potential to deliver considerable social impact to unbanked merchants in Indonesia which are largely women operated.” said Sisca Sari, CD Excellence Director, Unilever Indonesia, “This female empowerment and inclusiveness is aligned with Unilever’s purpose to make sustainable living commonplace.”
Recently Fairbanc also signed a partnership with one of the largest Indonesia conglomerate Sinarmas to extend credit through Sinarmas’s distributors to micro merchants that sell both Unilever and other FMCG products.
With its fresh capital, Fairbanc plans to make a bigger push into Indonesia, a country that hosts the fourth largest unbanked population globally, with 95 million adults still lacking a formal account at a financial institution. However, with a growing middle class, an increasingly tech-savvy youth population and a regulatory environment encouraging innovation and entrepreneurship, Indonesia is now home to the most billion-dollar tech start-ups in Southeast Asia (including Bukalapak, Go-Jek, Tokopedia, and OVO), boasting a range of e-commerce, ridesharing, media distribution, and financial services.
Fairbanc’s founder, Mir, is convinced that Indonesia offers Fairbanc the right backdrop to bring about a scalable solution that can be replicated in many other emerging countries to address one of the greatest challenges and opportunities of the century: providing the millions of merchants with the basics of credit to help fuel economic revitalizations that ends up uplifting millions of poor merchants out of dire poverty.
Fairbanc is a scalable, AI-powered mobile loan and payments platform for emerging market small- medium enterprises (SMEs) that requires no collateral, credit history, smartphone ownership or digital literacy.
Our machine learning powered platform can read digital footprints such as transaction history with large suppliers to grant instant digital credit line that SMEs can use to purchase inventories from our selected suppliers. Our proven gender-intelligent ecosystem for loans and payments can be used in many vertical markets, eliminating the shortcomings of cash. Retail shop-owners can boost sales up to 20%, eliminate cash shortages, enjoy an easier payments regimen, and develop a credit history; suppliers receive more consistent order cycles, more instant payments upon delivery, and SKU sales expansion.