Progreso Financiero Closes $28 Million in New Funding from Madrone Capital and Greylock Partners to Fuel Growth
Former Visa CEO Carl Pascarella Joins Board of Innovative Financial Services Provider for US Hispanics; Total Investment in Progreso More Than $50 Million
MOUNTAIN VIEW, CA (June 8, 2010) -- Progreso Financiero, a pioneer in helping underbanked Hispanic families build credit and gain access to mainstream financial services, announced today that it has secured a $28 million Series D round of financing from Madrone Capital and Greylock Partners, with additional commitments from CRV and DAG Ventures. The company also announced the appointment of Carl Pascarella of TPG Capital to the Progreso Financiero Board of Directors.
Progreso Financiero is a fast-growing provider of fair and responsible credit and payment products that provide a critical entry point for many Hispanics to establish credit and move up the economic ladder. Despite a mounting and pressing need among lower-income and underserved communities, many banks have been forced to pull back access to credit and basic banking services. Since its founding in 2005, Progreso Financerio has stepped in to fill this void by making more than 50,000 loans, extending $45 million in capital to underserved Hispanic families and expanding to 29 locations in the hardest hit communities across California. With this round of capital, the company has secured more than $52 million in total venture investment to help fuel further growth and reach more than one million borrowers in these communities within four years.
"Now more than ever, lower-income communities across America need access to innovative, responsible and affordable products that serve as a bridge to the financial mainstream," said James Gutierrez, founder and CEO of Progreso Financiero. "Progreso Financiero has developed and integrated proprietary technology and credit scoring into a high touch, culturally relevant experience that resonates with Hispanic families. Together, these innovations have allowed us to serve a highly underserved and fast growing segment while also providing a fair and responsible product that proves the creditworthiness and 'moral collateral' of the community. With the help of these world-class investors, Progreso will extend its reach even further to generate widespread and lasting social and economic impact."
Mr. Pascarella joins the Progreso Financiero Board of Directors with nearly 25 years of industry experience, including his 12-year tenure as President and Chief Executive Officer of Visa U.S.A., Inc. He is currently an Executive Advisor at TPG Capital, a leading global private equity firm.
"Progreso is the leader in effectively serving this enormous untapped market at scale and with incredibly high credit quality, even during our nation's deepest recession," said Mr. Pascarella. "They are a transformational company that is changing the way the fastest growing segment of our population accesses financial services. Personally, it is exciting to be a part of a company that is bringing fair and responsible lending back to the forefront of the banking industry."
More than 23 million Hispanics in the United States are unbanked or underbanked. With limited-to-no credit history, they have virtually no opportunity to access mainstream credit products from larger banks. Progreso Financiero fills this gap in the financial system by helping individuals with thin or no credit files build a credit history and engage in mainstream banking services. The typical Progreso Financiero borrower begins with no credit history, yet after three successful small loans that each average $950 for nine months, they can build to a credit score of 660. This allows them to qualify for more traditional products offered by larger lenders and financial institutions.
"We are excited to be a part of an innovative and socially responsible solution serving the tens of millions of individuals with a pressing need for access to affordable financial services," said Tom Patterson of Madrone Capital. "Along with its technology platform and risk scoring system, Progreso has built a team of proven industry leaders that can reinvent the way Hispanic communities build wealth."
"We are a continued supporter of Progreso Financiero, both for their accomplishments to date and for the opportunities they are pursuing going forward," says Greylock's David Strohm. "Progreso has a unique approach to financial services, combining innovation, education, responsibility and cultural relevance to provide the highest level of support to its customers."
More information about Progreso Financiero and its loan offerings is available at the Progreso Financiero website.
About Carl Pascarella
Mr. Pascarella is an Executive Advisor at TPG Capital, a leading global private equity firm. He joined TPG after retiring from Visa U.S.A., Inc. in 2005, where he served as the company's President and Chief Executive Officer for 12 years. Additionally, Mr. Pascarella served as President and CEO of Visa International's Asia-Pacific Region and Director of the Asia-Pacific Regional Board. Prior to joining Visa International, he held positions as Vice President of the International Division of Crocker National Bank and Vice President, Metropolitan Banking, at Bankers Trust Company. Mr. Pascarella holds a master's of science degree in management from the Stanford Sloan Program at the Graduate School of Business at Stanford University. He received his undergraduate degree from the University of Buffalo.
Greylock has partnered with entrepreneurs for 44 years to help them build market-leading businesses. Among the companies Greylock has supported are Ascend Communications, CheckFree, CipherTrust, Cloudera, Constant Contact, Continental Cable, Decru, Data Domain, digg, DoubleClick, Facebook, Farecast, Imperva, Internet Security Systems, Ikanos, Legato, LinkedIn, Media Metrix, Millennium Pharmaceuticals, Openwave, Open Market, Pandora, Red Hat, RightNow Technologies, Success Factors, Tellabs, Trilogy, Wily Technology, Workday and Zipcar.
About Madrone Capital Partners
Madrone Capital Partners is a principal investment firm located in Menlo Park, California.
About Progreso Financiero
Based in Mountain View, California, Progreso Financiero provides an opportunity for the 23 million Hispanics in the United States who desire and deserve access to mainstream financial services. Progreso is a U.S. Department of Treasury-certified community development financial institution (CDFI). The company's sophisticated risk scoring system uses hundreds of traditional and non-traditional data points to make fast, fair and responsible automated credit decisions that others simply cannot make. Progreso Financiero engages with customers in their neighborhoods, in their language, and with familiar faces from the community in order to create a bond of trust. The company has locations throughout California and is currently expanding into Texas. For more information, please visit: www.progressfin.com.
For Progreso Financiero