Letting a bank sniff around your Twitter, LinkedIn and Facebook profiles in order to decide whether to give you a loan? Sounds more than creepy to Americans. But in some parts of the world, being able to get credit based on a social media profile is a miracle. Lenddo, a New York-based startup that uses social media profiles to determine creditworthiness, has been giving out microloans in the Philippines and Columbia based on nothing more than the debtor’s social media reputation.
Lenddo has just announced its first significant round of investment. The company snagged $8 million from investors including Accel Partners, Blumberg Capital, and other funds, as well as prominent angel investors including Scott Heiferman of Meetup and Barry Silbert of SecondMarket.
The company is developing a Lenddo Score, based exclusively on social connections and loan history with Lenddo. Anyone who takes out a loan and pays it back boosts their own score and the scores of people they’re connected to. (The startup also cleverly makes use of social pressure when the bill comes due.)
“Lenddo seeks to improve the lives of millions of people in emerging markets,” founder and CEO Jeff Stewart said in a press release. “We witness the impact of our loans every day in the Philippines and Colombia. Members pursue education, help sick relatives and repair their homes after natural disasters — all made possible because of their positive online reputations.”
Although Lenddo only provides loans in two countries right now, the site has members in more than 35 countries. Membership doubles nearly every three months, the company said.
Lenddo will use the money to hire engineers and enter more emerging markets. “Lenddo has the potential to transform how millions of underserved in the emerging markets access credit,” Arjuna Costa, director, investments at Omidyar Network, said in a press release. “By linking community and reputation to creditworthiness, Lenddo has the power to replace the impersonal risk-assessment tools that currently exclude most of the world’s population.”
Lenddo recently hired former head of new markets at Google, Dan Gertsacov. The company currently has employees in Manila, Bogotá and New York City. Co-lead investors John Elton, a partner at iNovia Capital, and Bruce Taragin, managing director at Blumberg Capital, will join Lenddo’s board.