By Mark Kawalya
Ugandan asset financing startup Asaak has announced a $30 million pre-series A equity and debt funding round. The series had new and current investors such as Social Capital, Founders Factory Africa, Resolute Ventures, Decentralized VC to mention a few. The firm has also had several undertakings to enable it to make the dream of owning a motorcycle taxi possible for more Ugandan youth.
Asaak launched its services in Soroti District in 2016 and has since pivoted to motorcycle financing. The firm focuses on bridging the gap between riders’ access to finances and those who are often locked out by mainstream banking institutions.
This is mainly due to rigorous collateral requirements that banks stipulate, including chronological income history and sustained account activity, which most riders lack.
Asaak was founded by a team of four: Dylan Terrill, Anthony Leontiev, Edward Egwalu and Kaivan Sattar who came together to find a solution that would benefit bodaboda riders.
For security, the firm uses riders’ data generated from applications like Jumia and Safeboda to develop a credit score of the potential borrower. Alternatively, riders can also use the Asaak application or go to their branches to determine if they meet the criteria for financing. Riders receive up to $1,500 worth of credit after three days of approval, with a payable interest rate of 1 to 4% depending on their credit score.
In terms of uptake, the firm has financed the purchase of more than 5000 motorbikes and is expanding its portfolio to provide smartphones and a fuel financing product for riders.
“Asaak is enabling mobility-based work, which literally propels the economy forward and promotes upward mobility for these individuals,” Dylan Terrill said. “The lifeline of Africa is the bodaboda, which transports people and goods from home to school and work. They simply require access to motorcycles, which will give them improved economic options and enable them to support their families.”
Asaak is enabling a new breed of Ugandan boda-boda riders to own motorbikes, consequently disrupting the traditional model where they are employed by bike owners or rent the bikes.
The firm has partnered with e-commerce platforms and with Mobility, and its product is mainly targeted at riders who earn a living through working as motorcycle taxi drivers.
“By financing these types of assets, we’re not just creating a pathway to vehicle ownership, which is good in itself, but we’re creating a stable source of income because of the reliance of drivers throughout the countries that we are in.” Dylan added.
The firm has also collaborated with Samsung to drive up smartphone ownership among the riders. Additionally, the firm announced a partnership with Untapped Global, an investment firm that focuses its activities on emerging markets to finance uptake of more than 2000 motorbikes in the coming year.