Asaak, a Ugandan asset financing startup, has secured $30 million in pre-Series A equity and debt funding. The round saw the participation of 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 motorbike financing to operators, who are often locked out by formal banking institutions due to stringent security requirements comprising income history and regular account activity. The startup works with several partners including mobility and e-commerce platforms to make motorcycle ownership easier for the riders– who earn a living by operating motorcycle taxis (bodaboda), a popular mode of transport across Africa, and especially in major cities like Kampala. Through Asaak, bodaboda operators are now able to own the motorcycles they ride, compared to previously when most of them were either employed by bike owners, or were renting or leasing the motorcycles.
Using rider data from these platforms, Asaak creates a credit score of the borrowers. Borrowers can also use the Asaak app or physically visit their branches to know if they qualify for the financing. 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. Asaak, which started operations in Soroti Uganda in 2016, pivoted to motorcycle financing in 2019 after a period of lending to farmers then SMEs. The startup has so far financed the purchase of 5,000 motorcycles and has also started providing smartphones and fuel financing to the operators. They are also working with Samsung to drive smartphone ownership among motorcycle taxi operators. Last month, the company announced another partnership with Untapped Global, an investment company focusing on emerging markets to provide financing for more than 2,000 motorcycles over the next one year. The startup has also partnered with Standard Bank, headquartered in Johannesburg, South Africa and with a presence in 20 countries across the continent, to offer financial services to millions of workers (like motorcycle taxi operators) in the informal sector through the startup’s proprietary digital loan origination system. Through this partnership Asaak customers will also have access to tailored services encompassing both finance and insurance.