Numida, a Uganda-based fintech, has secured a $12.3 million pre-series A equity and debt funding led by Serena Ventures with participation from Breega, 4Di Capital, Launch Africa, Soma Capital, and Y Combinator. Existing strategic investor MFS Africa also made a follow-on investment, while Lendable Asset Management extended a $5 million debt to the startup.
Numida plans to double its active client base to 40,000 within the next 18 months, a goal that will be brought closer by its entry into two new African markets (selected from Ghana, Nigeria, Egypt, or Kenya).
Founded in 2017 by Mina Shahid, Catherine Denis, and Ben Best, Numida provides working capital loans to African micro businesses. Instead of borrowing from informal lenders or family, micro business owners download the Numida app, apply in minutes, and receive capital within a day.
For credit consideration, Numida, which is the first startup in the East African country to get into YC (W22), looks at various aspects of businesses, including the sector and cash flow. Repeat clients in good standing get their loans approved instantly, but new applicants, and repeat businesses seeking larger facilities, must wait for up to 24 hours to have the loans approved.
“When we started building this business, we saw that a lot of people were getting taken advantage of because they didn’t really understand the user terms because most people don’t actually read these privacy policies or user agreements to understand what they were giving up. And so, we wanted to be very conscious about our approach, and we only ask for information that helps us determine if it is a business and if the person applying for a loan is the owner of the business,” Shahid said.
“The information we use is the one provided by the customer on the app, so we don’t snoop or scrape any data…We have a bunch of historical data that helps determine whether or not the information we’re collecting is relatively in the right ballpark”.
Since raising its seed funding last year, Numida has grown over 7.5 times propelled by the soaring demand for quick loans. The startup has to date issued $20 million in working capital to micro and small businesses, having grown from issuing $250,000 a month to $2 million. The value of loans is set to grow as the startup continues to receive debt backing from institutions such as Lendable.
