Ugandan asset finance firm Asaak has raised $30 million in pre-Series A equity and loan investment, bringing the total amount raised to date to $60 million. The round included new and existing investors such as Resolute Ventures, Social Capital, HOF Capital, Founders Factory Africa, End Poverty Make Trillions, Decentralized VC, and a number of angel investors. Resolute Ventures, Social Capital, Founders Factory Africa, End Poverty, Make Trillions, Decentralized VC, and a number of angel investors participated in the round.
Asaak provides motorcycle financing to operators who traditional banking institutions often turn down because of strict security standards, including a history of income and consistent account activity.
Several partners, including mobility and e-commerce platforms, collaborate with the startup to make motorcycle ownership more accessible to riders – many of whom make a living by operating motorcycle taxis, known as bodas in Uganda, and a popular mode of transportation throughout Africa, particularly in major cities such as Kampala.
Because to Asaak, bodaboda operators now have the option to own the bikes on which they operate, as opposed to the past, when the vast majority of them were either hired by bike owners or were renting or leasing the motorcycles.
‘Asaak is unleashing mobility-based employment, which is essentially moving the economy ahead and allowing these folks to further their careers. People and merchandise are transported from home to school and work by bodaboda riders, who are the lifeblood of Africa. Asaak co-founder and chief business officer Dylan Terrill told TechCrunch that all they need is access to motorbikes, which will lead to improved economic options and the ability to care for their families.
In addition to Anthony Leontiev and Edward Egwalu, the founding team includes Kaivan Sattar and Edward Egwalu.
Asaak determines whether or not to approve riders for motorbike finance based on behavioral and financial data collected from Bolt, Jumia, Safeboda, and Uber, such as their earnings, trips were taken, and ratings.
Asaak produces a credit score for debtors based on information gathered from these platforms’ riders. Borrowers may also check their eligibility for financing using the Asaak app or by physically visiting one of their offices. Motorcycle finance (about $1,500 in credit) is often available to drivers within three days of signing up. Drivers pay an interest rate ranging from 1 to 4 percent, depending on their credit score.
When it comes to making a financing judgment, the more our confidence in the facts we have at hand, the fewer different standards they would need to meet. We’re working hard to make it as simple as possible for consumers to get loans from us. “However, in certain instances, it is important (to have a guarantor), and it makes financial sense from a financing standpoint,” Terrill said.
After lending to farmers and subsequently SMEs, Asaak, which began operations in Soroti, Uganda, in 2016, decided to focus on motorbike finance in 2019. So far, the business has funded the acquisition of 5,000 bikes, and it has also begun to provide cellphones and gasoline financing to the operators of the motorcycles.
By financing these sorts of assets, we are not only providing a road to vehicle ownership, which is beneficial in and of itself, but we are also providing a reliable stream of revenue, thanks to the dependency on drivers in all of the nations in which we operate,” says the CEO.
Also, in collaboration with Samsung, they are attempting to increase smartphone ownership among motorcycle taxi drivers. A new relationship with Untapped Global, an investment firm specializing in developing countries, was launched last month. The two companies will work together to offer funding for more than 2,000 bikes over one year.
Today, the startup has also formed a partnership with Standard Bank, which is headquartered in Johannesburg, South Africa, and has a presence in 20 countries across the continent. The partnership will allow the startup to provide financial services to millions of workers in the informal sector (such as motorcycle taxi drivers) using the startup’s proprietary digital loan origination system. Aside from customized financial and insurance services, Asaak consumers will benefit from this collaboration.
“While we sometimes underestimate the strength of the boda-boda (motorcycle transport) in Africa, in many situations, it serves as an ambulance, a chemist, and a chef — it provides you with everything you need in one trip.” This transportation system takes children to school, people to job interviews, and allows hundreds of millions of Africans to earn a living,” said Aaron Akampa, head of direct digital and e-commerce at Stanbic Bank, Standard Bank’s operation in Uganda. “It transports children to school, brings people to job interviews, and it provides livelihoods for hundreds of millions of Africans.”
Overall, this is new territory for Standard Bank – we haven’t collaborated with any other companies in this sector on the continent before – and this is the first time we are embarking on such an endeavor. “We are excited to see where this relationship will take us,” Akampa added.
The relationship with the bank comes at a time when Asaak intends to expand into six more African markets shortly.