Ugandan fintech Asaak raises $30m to support taxi operators’ acquisition of motorbikes and smartphones
Asak, a Ugandan asset finance startup, secured $30m in pre-Series A equity and debt funding. The round saw participation from new and existing investors including Resolute Ventures, Social Capital, HOF Capital, Founders Factory Africa, End Poverty Make Trillions, Decentralized VC and a number of angel investors.
Asaak offers motorcycle finance to operators, who are often blocked by formal banking institutions due to strict security requirements including income history and regular account activity.
The startup is working with a number of partners, including mobility and e-commerce platforms, to make it easier for bikers to own motorbikes – who make a living by operating motorbike taxis (bodaboda), a popular mode of transport across Africa, and especially in major cities like Kampala.
Thanks to Asaak, bodaboda operators can now own the motorbikes they ride, whereas previously most of them were either employed by bike owners or rented or leased the motorbikes.
“Asaak unleashes mobility-based work, which literally drives the economy forward and creates upward mobility for these people. Bodaboda runners are the lifeblood of Africa, transporting people and goods from home to school to work. They just need to have access to motorbikes, which gives them better income opportunities and allows them to support their families,” said the co-founder and business manager of Asaak. Dylan Terril.
Asaak approves riders for motorcycle financing using behavioral and financial data such as their income, rides, and ratings on platforms like Bolt, Jumia, Safeboda, and Uber.
Using data from users of these platforms, Asaak creates a borrower’s credit score. Borrowers can also use the Asaak app or physically visit their branches to find out if they are eligible for financing. Riders typically receive motorcycle financing (about $1,500 in credit) within three days of signing up and pay 1-4% interest depending on their credit score.
“The more certain we are of the data we have to make a loan decision, the fewer other requirements they will need. We try to make it as easy as possible for people to get loans. But in some cases, yes, it is necessary (to have a guarantor) and it makes sense from a lending perspective,” Terrill said.
Asaak, which started operations in Soroti, Uganda in 2016, moved into motorcycle financing in 2019 after a period of lending to farmers and then to SMEs. The startup has so far financed the purchase of 5,000 motorcycles and has also started providing smartphones and fuel financing to operators.
“By financing these types of assets, we are not only creating a pathway to owning a vehicle, which is good in itself, but we are creating a stable source of income due to the dependence of drivers in all countries. where we are.”
They are also working with Samsung to encourage smartphone ownership among motorcycle taxi operators. Last month, the company announced another partnership with Untapped Global, an investment firm focused on emerging markets to fund more than 2,000 motorcycles over the next year.
Today, the startup has also partnered with Standard Bank, headquartered in Johannesburg, South Africa and present in 20 countries across the continent, to offer financial services to millions of workers (like motorbike taxi operators) in the informal sector through sole ownership of the startup. digital lending system. Through this partnership, Asaak customers will also have access to tailored services covering both finance and insurance.
“While we often underestimate the power of boda-boda (motorcycle transport) in Africa, in many circumstances it is an ambulance, a pharmacist and a chef – it brings you everything you need. gets kids to school, it gets people to job interviews, it provides livelihoods for hundreds of millions of Africans,” said Aaron Acampa, Head of Digital Operations and Direct E-Commerce at Stanbic Bank in Uganda.
“Ultimately this is new ground for Standard Bank – we have yet to partner with other players in this space on the continent – this is the first time we have created a partnership like this. here and we can’t wait to see what lies ahead,” Acampa said.
The partnership with the bank comes as Asaak plans to enter six new markets in Africa in the near future.