A US $12.3 million pre-Series A round of equity and debt funding has been secured by the Ugandan fintech startup Numida, which uses proprietary credit models and tech-enabled underwriting procedures to offer unsecured working capital loans to African micro and small businesses (MSBs). This money will be used to grow the company’s workforce and enter new markets.
Numida was founded in 2017 by Mina Shahid, Catherine Denis, and Ben Best. Initially, it allowed conventional MFIs to offer unsecured credit to semi-formal firms, but it soon changed its focus to start making direct loans to micro and small businesses.
The firm may offer unsecured working capital loans to semi-formal African MSBs thanks to its own credit models and tech-enabled underwriting procedures.
Since its US $2.3 million seed round in April 2021, Numida has increased by 7.5 times and given 27,000 MSBs in Uganda access to more than US $20 million in unsecured working capital. With the support of its US $12.3 million pre-Series A investment, it will be able to increase both its workforce and its market reach. Ghana, Nigeria, Egypt, and Kenya are all strong candidates for the first stage of Numida’s pan-African expansion. The firm intends to treble its staff over the next 18 months, to 200 workers, in order to support this.
In addition to current investors MFS Africa, Breega, 4Di Capital, Launch Africa Ventures, Soma Capital, and Y Combinator also participate in the US $7.3 million equity component of the deal led by Serena Ventures. Lendable Asset Management will provide $5 million in debt to complete the round.
“Our claim to fame is that we’ve figured out how to score and disburse unsecured working capital to cash-based businesses that have no digital transaction history. We’re not reliant on any digital POS or e-commerce marketplace data and we also don’t scrape people’s phones. This has allowed us to significantly broaden our customer segment and serve the mom-and-pop shops that make up the majority of businesses in Africa,” said Shahid.
According to Alison Rapaport Stillman, general partner of Serena Ventures, some African FinTech companies have claimed that their ultimate goal is to finance small businesses, but Numida is already accomplishing this.
“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 US $500 loan to a business that has no collateral, operates in cash, and is semi-formal. We are excited to join their mission to unlock the potential of these businesses across the continent,” she said.
According to MFS Africa’s UK managing director, Patrick Gutmann, access is the only thing that counts.
“We became a strategic partner and investor in Numida because of its mission to conveniently and equitably give millions of micro, and small businesses access to finance that can transform these businesses. Since our initial investment, we have been impressed by Numida’s growth, and we are delighted to reaffirm our commitment to supporting them on their journey,” he said.