Ugandan fintech startup Numida, which uses proprietary credit models and tech-enabled underwriting processes to provide unsecured working capital loans to African micro and small businesses (MSBs), has raised a US$12.3 million pre-Series A round of equity and debt funding to help it expand its team and move into new markets.
Launched by Mina Shahid, Catherine Denis and Ben Best in 2017, Numida began life enabling traditional MFIs to provide unsecured credit to semi-formal businesses, but soon pivoted to begin lending to micro and small businesses directly.
The startup’s proprietary credit models and tech-enabled underwriting processes allow it to provide unsecured working capital loans to semi-formal African MSBs. Business owners download the Numida app, apply in minutes, and receive capital within a day, disbursed to their mobile money wallet.
Since its US$2.3 million seed round in April 2021, Numida has grown 7.5x and provided more than US$20 million in unsecured working capital to 27,000 MSBs in Uganda. Its US$12.3 million pre-Series A round will help it move into more markets and expand its team. Strong contenders for the first phase of Numida’s pan-African growth include Ghana, Nigeria, Egypt, and Kenya. To support this, the startup plans to double its team to 200 people over the next 18 months.
Serena Ventures leads the US$7.3 million equity portion of the round, with participation from Breega, 4Di Capital, Launch Africa Ventures, Soma Capital, and Y Combinator, as well as existing investor MFS Africa. The round will be completed with US$5 million in debt from Lendable Asset Management.
“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 ecommerce 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.
Serena Ventures general partner Alison Rapaport Stillman said her firm had spoken to countless fintechs in Africa who claim that their end game is to provide financing to small businesses, but that Numida was already doing just that.
“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.
Patrick Gutmann, UK managing director for MFS Africa, said his company believed access was the only currency that matters.
“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.
