Overview:
The funding was raised during a pre-Series A $7.3 million equity round led by Serena Ventures with participation from Breega, 4Di Capital, Launch Africa, Soma Capital, Y Combinator, and existing investor MFS Africa.
Numida, a Uganda-based fintech, has raised $12.3 million (about UGX47.5b) in an equity and debt funding round to enable it expand its strategy of lending to small businesses across the country and the region.
The funding was raised during a pre-Series A $7.3 million equity round led by Serena Ventures with participation from Breega, 4Di Capital, Launch Africa, Soma Capital, Y Combinator, and existing investor MFS Africa. The round will be completed with $5 million in debt from Lendable Asset Management.
With the funding, Numida will be able to provide unsecured working capital loans to several SMEs at low interest rates.
Alison Rapaport Stillman, the General Partner at Serena Ventures who led the funding round, said they were impressed by Numida’s strategy.
“We’re impressed by the strength and commitment of Numida’s team and their methodical approach to solving a very complex problem – how to give a $500 loan to a business that has no collateral, operates in cash and is semiformal. We are excited to join their mission to unlock the potential of these businesses across the continent,” he said.
Founded by Mina Shahid, Catherine Denis, and Ben Best in 2017, the startup has provided more than $20 million in unsecured working capital to 27,000 micro and small businesses.
Business owners can download the Numida app, apply in minutes, and receive capital within a day disbursed to their mobile money wallet.
Mina Shahid, the CEO of Numida, said that to provide a technology-based solution to the Ugandan population, Numida had to spend years perfecting its user interface and user experience.
“It’s very different designing a mobile app for someone who has never used a computer, which is the majority of our customers, compared to designing a mobile app for somebody who is tech savvy.”
He added that before launching in Uganda, the company had done test pilots in Ghana and considered Kenya, but chose Uganda because of its population and the market size of financially excluded SMEs.
According to Shahid, Numida relies on its 30-day loan product for business owners based on risk pricing to make money.
Shahid added that Numida created this model from the data it gathered from over 100,000 loans it has given out. He added that the rate for non-performing loans is in the single-digit range.
‘It’s very different designing a mobile app for someone who has never used a computer, which is the majority of our customers, compared to designing a mobile app for somebody who is tech savvy.”
mina shahid, ceo numida
According to Shahid, since their $2.3 million raise in April 2021, the company has also increased the percentage of its female users from 33% to 50%. Shahid said this was his proudest achievement, as Numida wanted to drive economic gender inclusion in Uganda. According to Shahid, this growth in female users was achieved by building trust with the female entrepreneur community through acquisition campaigns targeting women.
He added that with this raise, geographical expansion is in the works with Egypt, Nigeria, Ghana, Kenya, and Tanzania on the company’s horizon. Numida also wants to increase its user base in Uganda to 40,000 businesses, double its current size.