In a tough year for fundraising, the emerging markets fintech lender Lendable said it has raised $300 million across two funds to provide capital to digital financial services providers in emerging markets and to finance commercial solar, electric vehicles and electric cooking.
The commitments, including $86 million from International Finance Corp., suggest investors remain optimistic about the growth of business and consumer demand for loans in 20 countries, mostly in Africa and Asia. Lendable is expanding operations to India for the first time, as well.
London-based Lendable has increased its assets, to nearly $1 billion, in one of the worst years for impact fundraising, with a lending strategy for emerging market fintech companies.
“Each business is growing, and the number of fintechs, period, is growing. There’s just growth built into the business,” Lendable founder Daniel Goldfarb tells ImpactAlpha. Fintech lending is growing at more than 30% per year. “Each business is growing as well as the number of fintechs, period, is growing.
Motorbike financing company Watu in Kenya, for example, became a Lendable borrower back in 2017 with a $1.5 million debt package. The company has expanded its financing services to more than 30 countries, fueled in part by $65 million from Lendable. Watu’s now providing loans to finance e-motorbike adoption.
Green assets
Lendable will be doing more of that kind of lending with the first close of Lendable’s dedicated Transportation and Energy Fund. The fund represents a return to Lendable’s original mission of providing asset-backed financing in the then-nascent market for renewable energy systems and other sustainability solutions. The London-based company soon pivoted to providing capital to rapidly growing fintech lenders providing personal and business loans, often with mobile money.
“Fintech back in 2015 was a cute, exotic, weird asset class. We proved you could do it commercially,” said Goldfarb, who started Lendable with Dylan Fried to support pay-as-you-go solar financing in Africa. The market wasn’t ready then, he says; with falling costs for solar and storage it now is.
“We believe the same dynamics apply today for electric two- three and four wheelers, for residential energy, for small commercial and industrial energy, and for the supporting infrastructure,” Goldfarb said.
The transportation and energy fund’s first three investments are a small commercial and industrial solar developer that focuses on the agriculture sector in India, an Indian e-rickshaw business, and an electric motorbike company in Uganda.
Loans from the energy and transportation fund will be backed by assets in the form of receivables for repayments to the local lenders, much the same way that loans from Lendable’s Fintech Credit Fund 2 are backed by repayment agreements from fintech borrowers.
Investors have shown renewed enthusiasm for fintech companies amid a broader rebound in VC activity last year (of note: 50% of all VC dollars went to AI companies; fintech accounted for 12%). Fintech startups raised close to $52 billion, a 27% increase from 2024. Growth and late-stage deals were responsible for the uptick.
Currency risk
Goldfarb says demand for Lendable’s dollar-denominated loans fell when interest rates spiked, but has rebounded as rates fall. With US interest rates going down, Lendable is poised to deploy a lot of that new capital it has raised, Goldfarb adds.
“You’re seeing the market grow again because suddenly the US dollar is becoming an appealing source to grow their businesses.”
He said the company manages its risks, protecting both borrowers and its loan book, for example, by requiring its borrowers to hedge currency risks.
“We’re one of the only lenders in the market that mandates hedging of US-dollar liabilities,” says Goldfarb. That saved its portfolio in Egypt three years ago when the government devalued the Egyptian pound. “It was not an easy time, but because of our hedging with our borrowers, we were able to make it through that period together,” he shares.
The company has backed more than 45 companies in 16 markets, including relatively established fintech ecosystems like Mexico, Kenya and South Africa, and frontier markets like Benin, Tanzania and Cote d’Ivoire.
“We’ve always targeted second and third tier markets because they don’t have robust local capital markets. There’s more need for offshore capital,” says Goldfarb.
Its newest market is India, where it’s focusing on e-mobility and other still-niche sectors that local lenders aren’t serving at scale. The company is also growing its local team in South Africa.
“Eighty to 90% of fintech debt capital needs are taken care of in the local market. But there are still gaps, and because India is so big, those gaps are still very large,” Goldfarb explains.
