Ugandan fintech, Asaak, has managed to raise $30 million in pre-Series A equity and debt funding through a round that saw the participation of investors such as United States-based venture capital firm, Resolute Ventures, Social Capital, HOF Capital, Founders Factory Africa, End Poverty Make Trillions, Decentralized VC and a number of other notable investors.
Asaak, which started its operations in Soroti Uganda in 2016, offers motorbike financing to operators, who would otherwise be locked out by formal banking institutions due to stringent security requirements comprising income history and regular account activity. By working with a number of mobility and e-commerce platforms like Bolt, Jumia, Safeboda, and Uber, Asaak is able to use their data to create a credit score of the borrowers through monitoring their ratings, behavioral and financial data such as earnings, and trips they make before financing them. This enables the borrowers to earn a living by operating their own bodaboda services compared to previously when most of them were either employed by bike owners or were renting or leasing the motorcycles.
“Asaak is unlocking mobility-based work, which literally moves the economy forward and creates upward mobility for these individuals. Bodaboda riders are the lifeblood of Africa, moving people and cargo from home to school to work. They just need access to motorcycles which leads them to better income opportunities and makes them able to provide for their families,” Asaak co-founder and chief business officer Dylan Terrill told TechCrunch.
Drivers usually receive motorcycle financing (about $1,500 worth of credit) within three days of signing up and pay an interest of between 1 to 4% depending on their credit score.
“The more confident that we are with the data that we have to make a lending decision, the less the other requirements they would need to have. We’re trying to make it as easy as possible for people to get loans. But in some cases, yes, it’s necessary (to have a guarantor) and it makes sense from a lending perspective,” added Terrill.
Asaak also announced a partnership with Standard Bank, headquartered in Johannesburg to offer financial services to millions of other workers in the informal sector through the startup’s proprietary digital loan origination system. The startup has so far financed the purchase of 5,000 motorcycles and has started providing smartphones and fuel financing to the operators even as it prepares to enter other six new markets in Africa.