Asaak, a Ugandan fintech startup, announced that it raised $30 million in a pre-Series A equity and debt funding round. The round had a number of new and existing investors investors including Resolute Ventures, Social Capital, HOF Capital, Founders Factory Africa, End Poverty Make Trillions, Decentralized VC and a number of angel investors.
Asaak intends to use the funds to support the acquisition of motorbikes and smartphones for taxi operators.
Founded in 2016 by Dylan Terrill , Anthony Leontiev, Edward Egwalu and Kaivan Sattar., Asaak is a Ugandan-based fintech company that provides asset financing to entrepreneurs across Africa. It pivoted to motorcycle financing in 2019 after a period of lending to farmers then SMEs. They had been farming villages with agriculture machinery.
Asaak has so far financed the purchase of 5,000 motorcycles, and has also started providing smartphones and fuel financing to the operators.
Like the typical lending startup, Asaak makes money by charging a premium on the loans that they advance. They raise funds from institutional investors, at an interest rate, then advance loans to borrowers at a marked-up interest.
According to Dylan Terrill, co-founder and chief business officer in a discussion with TechCrunch, “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.”
To approve a rider for motorcycle financing, Asaak creates a credit score from behavioral and financial data extracted from platforms like Bolt, Jumia, Safeboda and Uber.
Successful applicants 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,” said Terrill.
Asaak says it plans to enter six new markets in Africa in the near future.
