PayJoy: $300M Business with Smartphone Loans

Imagine going nine months without a mobile phone in today's connected world. That was the reality Lerato Motloung faced until February 2024 when she stumbled upon PayJoy, a startup dedicated to extending lending services to underserved communities in emerging markets. Motloung's story is just one among millions of customers whose lives have been transformed by PayJoy since its inception in 2015. 

Headquartered in San Francisco, PayJoy's mission transcends mere profit-making; it's about fostering economic freedom and digital connectivity in underserved regions. By offering a fair and responsible entry point into the financial system, PayJoy enables individuals to build credit and access modern financial services.

Co-founder and CEO Doug Ricket underscores PayJoy's commitment to inclusivity: "We meet customers where they are — even with no bank account or formal credit history, we create access to financial services and carve a path into the financial system."

Central to PayJoy's model is a buy now, pay-as-you-go approach tailored to the approximately 3 billion adults globally without credit. Through this model, customers can purchase smartphones and repay weekly over a 3- to 12-month period, with the devices serving as collateral for the loan. Importantly, PayJoy ensures transparency by disclosing the full price upfront and offering an interest-free structure with no hidden fees.

The company's exponential growth speaks volumes about its impact and viability. By the fourth quarter of 2023, PayJoy boasted an annualized run rate exceeding $300 million and achieved profitability, a testament to its sustainable business model. Last year, it secured a significant $150 million in Series C equity funding and $210 million in debt financing, propelling its expansion into seven countries across Latin America, India, Africa, and the Philippines.

In addition to providing over $2 billion in credit to date, PayJoy introduced innovative initiatives like the PayJoy Card in Mexico, offering customers a revolving line of credit upon successful repayment. Leveraging data science and machine learning, PayJoy enhances credit assessment accuracy, enabling cheaper credit and reduced default rates.

With a robust workforce of 1,400 employees and over $400 million raised in debt and equity, PayJoy is poised for continued growth and impact. As it charts a path towards over 35% revenue growth and expands its footprint, PayJoy remains steadfast in its mission to empower underserved communities and drive meaningful change.