Welcome to the NVCA Blog series, Building Better, where we celebrate the dynamic relationship between our VC members and their innovative portfolio companies around the nation. For today’s Building Better, we spoke with Steve Murray, Managing Partner at Revolution Growth, and with Shivani Siroya, Founder and CEO of Tala, a Revolution Growth portfolio company. Learn about their partnership in the Q&A below!
Revolution Growth: Steve Murray
Give us some background on Revolution: How did the firm start, what is your mission and how does the firm strive to meet its goals?
Revolution is an investment firm, based in DC, founded by AOL co-founder Steve Case in 2005. We work with entrepreneurs across all stages and have three funds: Revolution’s Rise of the Rest Seed funds, Revolution Ventures, and Revolution Growth. I lead our later stage fund, Revolution Growth, along with Steve and Ted Leonsis, founder and owner of Monumental Sports & Entertainment.
We work hand-in-hand with our founders to build and scale category-defining companies and have nearly $1B under management. A common thread across our firm is the focus on venture communities in high-potential geographies outside of Silicon Valley. Emerging cities offer compelling costs and lifestyle benefits and more recently, have had the opportunity to attract high-demand talent with the tech flight from some of the more traditional venture hot beds.
What does Revolution look for in a partner when choosing to invest in a portfolio company? What does Revolution value? What do you value in the Tala team?
We value companies that are leading disruption within their industry. We have investments across consumer and food; sports, media, and entertainment; enterprise software and SaaS; fintech; real estate tech; and supply chain logistics. We look for entrepreneurs that are passionate about their business and transforming the future of their industry.
In 2018, we led Tala’s Series C and I joined their board of directors. We knew then it was a big idea: digital banking services, led with credit, for the emerging world. Tala founder and CEO Shivani Siroya observed the problem first-hand while working at the UN and assessing the impact of microcredit in sub-Saharan and West Africa. She saw too many people who applied for bank loans for a few hundred dollars, only to be rejected.
Tala is building next generation financial services and is committed to putting their customer first. The emerging consumer credit market is massive with more than 3 billion people underbanked, located in some of the world’s fastest growing economies. The global pandemic has accelerated the company’s plans to expand their services and broaden financial inclusion.
How does Revolution support its portfolio companies? How does it help entrepreneurs grow and advance the VC industry?
At Revolution Growth, we take our partnerships with our founders very seriously. We lead rounds, actively serve on boards, and open up our networks for partnership opportunities with customers, advisors, investors and acquirers. Our team has deep experience managing capital in uncertain environments and this past year, we worked closely with every company in our portfolio to revise their operational and financial plans and optimize their position post-pandemic.
Another defining element of our fund is the policy expertise that we offer to our portfolio leadership – this has taken on more meaning in recent years with the increased likelihood of tech regulation. Our ability to help entrepreneurs see beyond their company is what helps them grow. Because we serve on a number of boards, we can advise how similarly-sized businesses are approaching different challenges and opportunities and contribute to a broader perspective.
Tala: Shivani Siroya, Founder and CEO
What is the mission of your company and how did you start? How has your partnership with Revolution helped you fulfill your mission?
While researching microfinance for the United Nations Population Fund, I interviewed thousands of people in developing countries to understand their financial habits and needs. I learned that most of them had reliable financial capacity, but no way to prove it to formal institutions, which prevented them from accessing the capital they needed to grow their businesses or better support their families. I also saw how massive the problem was—some 3 billion people globally are considered financially underserved, and the unmet need for credit in developing countries is upwards of $2.1 trillion. So I started to brainstorm ways to capture the data generated by people’s daily lives to prove their potential, better assess their needs, and design a scalable, customized liquidity solution.
What that looks like today is a radically accessible, 100% digital consumer credit product that’s helped more than 5 million people across Kenya, the Philippines, Mexico, and India start and expand small businesses, pay school fees and bills, and build more stable financial lives.
Revolution Growth led our Series C round in 2018, which helped accelerate our growth out of Kenya to our second and third markets – the Philippines and Mexico. Managing Partner Steve Murray joined our board at that time and has been an exceptional advocate and mentor as we’ve continued to expand our reach and navigate macro challenges in our markets. He’s also supported our executive team in managing our evolution from a startup to later stage company.
Where and how is your company looking to grow into the next 5 years?
Tala has spent the past 6 years perfecting our credit business, building a great deal of trust with our customers, and standing up the end-to-end infrastructure we need to deliver credit to this population. The next 5 years will be about leveraging these advantages to become a holistic financial partner to the underbanked. We know that our customers need a full suite of financial tools to weather emergencies, take advantage of opportunities, and be financially healthy. But the formal financial system isn’t set up to help them succeed. Our near-term product roadmap is focused on delivering digital banking services that save our customers time and money and help them build towards their financial goals. We are already seeing in our beta launches that the more value we give customers, the more value we get in return.
We are also excited to continue growing in India, one of the world’s most dynamic markets with a fast-growing, financially underserved population. Additional geographic expansion is always under consideration, particularly in those regions where we have built a strong foothold.
What problem is your company trying to solve for?
The easiest way to understand the problem is to put yourself in the shoes of one of our customers. The typical emerging middle class person has a steady, even salaried income, but is still transacting mostly in cash and relying on informal, sometimes predatory services. They can’t borrow formally, because they don’t have a credit history. They can’t safely save or store their money, because bank accounts have high minimum balance requirements and too many hidden fees. They can’t pay bills or send money to family without losing additional money in transaction fees. They don’t have insurance to help them manage financial shocks, such as medical emergencies.
Tala wants to be the partner that puts them in control of their financial lives. We’re taking advantage of the most connected moment in human history to bypass the typical barriers to reaching this population. Tala’s fully digital solution lowers the cost of servicing—savings we can pass on to the customer—and gives us the data we need to better understand their capacity and design for them, in a way that traditional banks can’t.
How has Revolution impacted your company’s future for the better?
Revolution Growth and Steve Murray have been instrumental in helping us grow across all aspects of our business while keeping our mission and customer front and center. Particularly over the past year, Revolution helped us navigate the COVID crisis and ultimately build a stronger company that is positioned to take advantage of new opportunities in our markets. Having a seasoned, steady hand to guide us through an economic downturn was invaluable to me and to our entire global leadership team, and gave us the confidence to keep building and keep growing.
Cassie Ann Hodges serves as Director of Communications at NVCA where she leads NVCA’s strategic communications, branding and content development, and media efforts to better support and empower the venture community, startups, and entrepreneurs. She also oversees the NVCA StratComm Peer Group network and programming.