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This Startup Marries Gaming With Mobile Micro-lending

Would be entrepreneurs describe their proposed ventures in mashup style, “It’s like Groupon GRPN +4.1% meets Zillow Z +5.51%” or “It’s Etsy for Dog Products.” Most of the combinations I hear make me nod in quick understanding – which is the point. Yet, one pitch I heard recently at a Topstone Angels pitch event made me raise my eyebrows because it was so unusual, yet it seemed to hold so much potential.

Meet Rachel Cook. Her start up, Seeds, is a “social gaming meets mobile micro-lending” play. SEEDS is focused on harnessing the 3 billion hours we spend EACH WEEK playing games to create reinvestment in for-profit micro-lending.  I caught up with her after the event to learn more.

Kate: Your venture is focused on helping women entrepreneurs in developing countries. What gave you this idea?

Rachel: I grew up in a tiny farmtown in Ohio, and studied English, Economics and Film at Duke.  After college I was working as a Futures and Equities Trader to pay the bills. I found the environment to be sexist in a way that I was surprised still existed in 2008.  I was often the only female trader at a company, or one of a few.  I think this fact made me more interested in seeking out an opportunity to give women a leg up.

One day I was sitting on the trading desk at 3 in the morning (the European shift), and I came across an op-ed in the New York Times about the positive impact of microloans – loans as small as $25, repaid with interest – on women in the developing world.  These women often had less access to education than the men in their home areas and were forced to marry very young.  Seeing the huge impact a tiny loan could make on woman’s life was hugely inspiring to me, and the fact that returns hovered around 99% was appealing to the investor in me as well.

Kate:  But first you made a film?

Rachel: Yes. I had been thinking more about filmmaking and its broad reach, and that led me to launch The Microlending Film Project, a global documentary I directed and produced about the remarkable impact of microloans on women’s lives.  We shot on 4 continents, and when we were filming in Nairobi, Kenya, I first became aware of the sophisticated mobile money transfer infrastructure in place in East Africa. Virtually everyone, even people poor enough that they had to live in sheetmetal shacks in Nairobi’s slums, had access to a cell phone, and they were able to buy almost anything they needed simply by transferring money via text messages.  I came back to the US and thought a lot about other industries that this could be connected to in the developed world, and the answer I landed on was social gaming.

Kate: Social gaming and microlending – what connects them?

Rachel: Social gaming and mobile microlending may not seem like an obvious pairing, but marrying them makes sense for a key reason: women. Contrary to what many people think, the average social gamer is a 43-year-old woman. Women play these games and spend money in them. For example, women over 35 spend the most money buying virtual currency in World of Warcraft. Women tend to lend more on web-based microlending platforms like Kiva.org and FINCA.org as well and women worldwide pay back microloans at overwhelming rates, usually as high as 98%.

In our culture, we often feel guilty about mental types of recreation. We think of time spent playing games as time wasted; game-playing is relegated to the category of “leisure” and looked down on rather like women watching soap operas in the past.  But what if we redefined what it means to play a game?  What if children in the future learned that games were not just fun but that playing them could also help people?  Maybe we could end global poverty through gameplaying alone.  I feel like a future in which games help us to solve the world’s challenges is one I’m excited to be a part of.

Kate: I know you have been testing the concept. How is it going?

Rachel: Incredibly well.  We built our own game to test assumptions about user behavior and disbursed a batch of microloans in Nairobi, Kenya at the beginning of last August.  They were 100% repaid in 4 months, and all payments were on time.  The full gaming ecosystem works, and we’re in conversations with two top-notch gaming companies, Gree and XMG Studios, to integrate Seeds, allowing us immediate access to hundreds of millions of users.  Gree alone has 200 million+ gamers on their system. This symbiosis could revolutionize microlending in the Third World.

Kate: I understand how the microloan recipients win and how you win – but what’s in it for the companies you partner with?

Rachel: We offer an attractive value proposition to gaming partners, beyond the obvious compelling fact that we can really help people through Seeds.  We can offer gaming partners an additional revenue stream, because we can pay them a portion of the interest collected on the microloans.  We can help them get any excess virtual currency off their books for a profit, and we can help them engage users for an extended period of time, as well as acquire new users they would otherwise not reach, so everyone wins.

Kate: So how does it actually work?

Rachel: Seeds is integrated directly into the game environment, so that users already playing a game can choose to make a microloan through the game with a virtual purchase.  The money goes directly to the cell phone of a borrower in Kenya, or elsewhere, through a text message, and the loan is repaid in the same manner.
Kate: What are you looking for at this point?

Rachel: We are looking to raise a $1mm round, largely to build our engineering and biz dev teams, so that we can focus on tailoring the Seeds integration to the needs of each of our gaming partners. We are looking for smart, creative investors who care about transforming the world while making big profits, as well as those already involved in gaming and/or microlending spaces.

We’d also love to hear from any and all gaming companies interested in working with Seeds!

Kate: I think this is a clever venture that can absolutely translate the simple pleasure of gaming into a profound catalyst for change for women in living in poverty. I wish you success, Rachel. Thanks for taking the time to talk with me.