Ugandan asset financing startup, Asaak, secures $30 million to support region’s taxi operators
Ugandan asset financing startup, Asaak, has secured $30 million in pre-Series A equity and debt funding that saw the participation of new and existing investors among others, Resolute Ventures, Social Capital, HOF Capital, Founders Factory Africa, End Poverty Make Trillions, and Decentralized. The startup offers motorbike financing to operators who are unable to get financing from formal banking institutions due to stringent security requirements such as income history and regular account activity.
Asaak works with a number of partners including mobility and e-commerce platforms to make motorcycle ownership easier for the riders to help them earn a living by operating motorcycle taxis. The bodaboda operators are therefore enabled to own their own motorcycles compared to 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.
Asaak approves riders for motorcycle financing using behavioral and financial data like their earnings, trips made and their ratings from platforms like Bolt, Jumia, Safeboda, and Uber. Using rider data from these platforms enables the company to create a credit score for the borrowers. They have an option of accessing their statuses for financing through the Asaak app or by physically visiting the branches. They are able to receive financing of 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 started operations in Soroti Uganda in 2016, pivoted to motorcycle financing in 2019 after a period of lending to farmers then SMEs. It has so far financed the purchase of 5,000 motorcycles and has also started providing smartphones and fuel financing to the operators.