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, a San Francisco, Calif.-based fintech startup with a cloud-based lending platform, announced this morning it has raised $20 million in the first closing of a Series B round of funding.

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, a New York-based cross-border venture capital firm with a Brazil focus, led the investment. Existing investors (managed by ) and Velocity Capital also participated in the round.聽The funding brings Migo鈥檚 total raised since it was founded in 2013 to about $35 million, according to , the company鈥檚 vice president of partnerships.

The company expects to raise 鈥渁t least鈥� another $10 million to $15 million by year鈥檚 end from a strategic corporate investor, Bergmann said. Migo had previously raised $11 million in a Series A led by The Rise Fund in August 2018 and about $3.5 million in seed funding prior to that.

The company, which has previously only operated in Nigeria, plans to use the new capital in part to expand into the Brazilian market, hence Valor鈥檚 involvement. In announcing the funding, Migo also announced it had formally changed its name to Migo from Mines.io.

How it works

Migo emphasizes that it鈥檚 not an app, unlike other personal lenders operating in the space. It works with enterprises such as telecommunication companies, merchants and banks to be able to offer loans to their individual customers through a co-branded cloud-based product. Migo also differentiates itself from other popular lending platforms in that it claims to target 鈥渦nderbanked鈥� customers who are not typically covered by credit bureaus and can not afford smartphones. The company has underwritten more than 7 million loans since 2017, according to Bergmann.

鈥淲e鈥檝e built and designed a full stack of technology and partnered with enterprises to help them provide loans, usually within 2-3 minutes, to customers that they could not normally provide loans to,鈥� Bergmann told me. 鈥淲e鈥檙e not trying to be disruptive. We鈥檙e working with local partners and unlike others that have an app who are only accessing people that can afford to have a smartphone, we are trying to reach a broader market.鈥�

Because the company is not trying to disrupt any given market (it claims to instead work closely with local regulators and even operates its own bank), its strategy is to 鈥済o very deep鈥� into the market in which it operates.

The enterprises in turn provide data to Migo, which then uses that data to make credit decisions. The company believes its big data approach makes the company stand out, as it aggregates 鈥渕assive amounts of data across all of its partners to improve population coverage and credit decisions over time.鈥�

Migo works with a slew of entities such as mobile operatorsand, payment companies andand banks such as and.

鈥淲e鈥檙e highly supported by local and national governments in Nigeria,鈥� Bergmann told me. 鈥淲e are loved in the system, and believe that鈥檚 why we鈥檝e been so successful. So with that playbook, we are now approaching Brazil and hope to be even more successful earlier.鈥�

An estimated 90 million adults in Nigeria and 100 million adults in Brazil have no access to credit. As such, the company views the sector as 鈥渁 massive area of untapped growth for emerging market banking ecosystems.鈥�

鈥淭he typical Silicon Valley approach of move-fast-and-break-things doesn鈥檛 work well in emerging markets,鈥� noted Bergmann. To create durable solutions, it is important to combine the audacity of cutting-edge technology with humility to the nuances of local markets.鈥�

As part of the financing, , a partner at Valor Capital, has joined Migo鈥檚 board of directors.

Migo started out as a research project on high-performance artificial intelligence led by Migo Chief Scientist , a professor of computer engineering at . By chance, he met Migo CEO , a computer scientist working on big data projects at Amazon Web Services. Following their meeting, the pair teamed up to build the Migo platform.

Some context

Migo is one of several startups focused on helping Brazilians have increased access to personal financing options. Last month, we reported on聽, which operates a digital bank in Brazil, reportedly raising $94 million in funding in a round led by and , according to a news report from Brazilian publication . And in July, Silicon Valley venture firm confirmed it led a $400 million round for Brazilian fintech startup , marking that firm鈥檚 first 鈥渟ignificant鈥� investment in Latin America.

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