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Fido, Ghanaian Mobile Loan Fintech, Raises $30m in Series A Equity Funding Round
Fido, a Ghanaian fintech that gives mobile loans of up to $250 to individuals and small businesses, has raised $30 million in equity investment and undisclosed debt funding.
The Series A round was led by Israel-based private equity fund Fortissimo Capital, while Yard Ventures, a VC fund by Harvard alumni, participated. Fido, which had previously raised $8 million, now has a total of $38 million in equity funding. Through rapid growth, Fido has amassed thousands of customers in Ghana in seven years, issuing mobile-based credit.
The startup said the new funding will be used to add more services to its portfolio and expand beyond Ghana to other African markets – the next market, which will be its second, is Uganda. In addition, fintech will open its second research and development center in Accra, Ghana’s capital, to augment its Israel branch and to help it automate most of its operations to ensure sustainability in the long term.
Fido told TechCrunch that it is planning to add savings and payment products to its portfolio later this year.
“What we are seeing in the market today is a segment of customers, who are mostly small entrepreneurs, that don’t really have access to traditional banking systems … and we see an opportunity to offer these customers, who are outside banking systems, savings products that are fully digital and very easy to use,” Fido CEO, Alon Eitan told TechCrunch.
“Customers will be able to deposit from mobile money, cards and even cash, and we receive attractive returns on those savings. Our payments product will be layered on top of existing payment rails, as we want to create interoperability between all the different payment rails that are popping up in different countries today,” said Eitan.
Founded by Nadav Topolski, Tomer Edry and Nir Zepkowitz, Fido has a team of 65 employees including digital debt collectors, who Eitan says, use ethical approaches to follow up on late repayments. Eitan told TechCrunch that it is easy for customers to set up a Fido account as its digital registration is only about 10 minutes long.
To register, customers are required to upload their headshots and copies of their identity cards, which are then validated by Fido’s image recognition model and checked against existing databases. Eitan said this multistep verification prevents fraud.
He added that fintech relies on credit-scoring technologies to determine the amount it can lend to borrowers.
“We have been able to solve default rates with very clever machine learning models. And modestly, I could say that our results are second to none in the continent. We have low-single-digit default rates, which is, I think, unheard of in our space. And we’re able to do that because we’re relentlessly focused on delivering new machine learning models in space. We’re currently operating more than three models just on the risk side, and we’re going to soon release a fourth one. We also have models around fraud too,” he said.
Eitan disclosed that fintech has so far underwritten 1.5 million loans, valued at $150 million, to 340,000 customers in Ghana. This amount is set to grow as it enters other markets in Africa, starting with Uganda.
“Uganda in many ways resembles Ghana, and we understand the regulation very well. We think it’s a very big market, both in terms of population size, but also in terms of the penetration of mobile. So, there are about nine million mobile accounts in Uganda and so it’s very important for us to go to a market that is already mature because it helps us deliver our services instantly, which is what we really want to do,” he said.
Fortissimo Capital partner, Yochai Hacohen, said Fido has differentiated itself in the competition by using ‘disruptive technology’.
“We are truly impressed by [Fido’s] ability to underwrite people instantly while delivering sustainable economics. This differentiates them from the other players in the space.”
“Fido brings a genuinely differentiated offering that solves an enormous challenge by using disruptive technologies. Now world-class fintech technology is available to all, for mutual growth and shared prosperity,” he said.
African Fintech Funding Forecast To Double In 3 Years
In Africa’s tech start-up scene, Fintech has been the center of attraction for close to 6 years now, which has continued to overshadow all other start-ups in funding. In 2021, Fintechs in Africa dominated the fundraising where it accounted for nearly $3 billion, or two-thirds of all investment realized by start-ups across the continent.
With an increase in mobile phone usage and internet penetration in the African region, it has triggered an increase in funding for these start-ups, most especially fintechs.
Recent research from blockchain-based mobile network operator, World Mobile company, revealed that African business leaders are forecasting a surge in spending on tech start-ups as foreign direct investment and improved internet connectivity will no doubt establish the African continent as a tech superpower.
While conducting research, the world mobile company reportedly interviewed 100 senior executives at companies based in the African region, countries such as Nigeria, Tanzania, Angola, Cameroon, Botswana, South Africa, Ethiopia, and Ghana.
It disclosed that more than half, which is an equivalent of 54% of African executives, expect spending on tech start-ups on the continent to more than double by 2025 to $10 billion or more. About 75% of these executives believe investments will come from Western countries, while 66% believe China will be a major source of investment.
About 90% of executives believe that Africa’s tech ecosystem will grow by at least its current size in the next 3 years with 15% expecting it to double in size. They believe that the massive growth of Africa’s tech ecosystem will expand the continent’s role in playing a huge role by supplying technology to the rest of the world.
Over the years, it has been a feeling of ecstasy that the negative perception once held about the African region is gradually changing. The region has witnessed a significant rise in its status as the region is fast becoming a hotbed for fintechs.
Today, the continent accounts for about 7 start-up unicorns worth over $1 billion. The tech revolution in the continent continues to redefine the possibilities for individuals and societies.
Some have predicted the continent will be a tech superpower in the future, due to its rapidly expanding tech start-up ecosystem. Some tech creators in the region are constantly creating incredible innovations which have seen the region witness an influx of investors.
The potential for tech on the continent is indeed limitless. These tech innovations have continued to solve problems the region is often faced with, most especially mobile money transfers.
With the arrival of these tech start-ups, it has no doubt eased the way of doing business in the region. With each passing day, different fintech innovations are being invented. It is really interesting to know that the continent has not even scratched the surface, as it is only starting. Given its large and developing population, Africa is a currently untapped fintech expansion opportunity.
The Commendable Kaduna State Experiment
His positioning has been weakened because of the genocide in southern Kaduna which seems hopeless of being brought under control by both the state and national governments. But excluding that (if you can), Nasir El-Rufai, the governor of Kaduna State, has demonstrated uncommon boldness which can lead to sustainable reforms.
I admire what he has done in the education sector by weeding out unqualified teachers. That is a very bold playbook which we must appreciate: “The Kaduna State Universal Basic Education Board (KADSUBEB) says it has dismissed 2,357 teachers who failed the recently conducted competency test. ..the board conducted a competency test for over 30,000 teachers in December 2021.”
No kid should be unfortunate to be taught by a bad teacher. What Nasir El-Rufai has done should be scaled across Nigeria. If a teacher cannot pass the same exam he is administering to kids, he has no mission to teach. The labour union should support the government on this because it is the only right policy for the future.
She said that 2,192 primary school teachers including the National President of the Nigeria Union of Teachers (NUT), Audu Amba, had been dismissed for refusing to sit for the competency test.
She said that some 165 of the 27,662 teachers that sat for the competency test were also sacked for poor performances.
The News Agency of Nigeria (NAN) recalls that the Kaduna government in 2018 sacked 21,780 teachers who failed a competency test, and replaced them with 25,000 others recruited through vigorous processes.
In December 2021, the board also sacked 233 teachers over alleged possession of fake certificates.
Chinese Government Unveils New Policy To Review Every Social Media Comment Before Publishing
The cyberspace administration of China has announced a new policy that requires all comments posted on websites to be approved before publication.
The new policy is aimed at making China’s internet space safer. The rules are also designed to safeguard national security and public interest as well as protect the legitimate rights and interests of citizens, adding that the public can provide feedback on the regulations.
The policy has outlined requirements for publishers/websites to hire a review and editing team, and a sustainable scale of services to prevent nasty comments from being published online.
These editing teams will be mandated to review every single comment, and if they come across any comment that is illegal and false, they should not hesitate to report it to the administrator.
Another requirement is the improvement of complaint mechanisms so that members of the public can also report comments they feel deserves attention from the review and edit teams. The policy further requires that sites should verify account holders’ real names, suggesting that actual real-world consequences may follow posting comments that Beijing opposes.
It has been disclosed on the Chinese Twitter-like platform, Weibo, the hashtag “comments will be reviewed first then published”, is said to have received more than 35.2 million views.
Content platforms in China are known to actively censor online posts that are critical of the government which are deemed culturally or politically sensitive. Officials on the Weibo platform disclose that citizens have on countless occasions posted several awkward comments that went rogue, pointing out lies about the government.
This new policy didn’t sit well with Chinese citizens, as they have expressed concerns about this new rule, stating that their online spaces for free speech will be further eroded.
A user on the Chinese Weibo Twitter-like platform expressed his concerns where he stated that such policy is rigid as it wouldn’t make sense to see only one particular voice of opinion on an issue or topic.
In his words, “I can’t imagine what it will be like to see only one particular voice of opinion. Will people think that in real life, there is only a single voice?” the Weibo user wrote.
Looking at the fact that the constitution of China states that its form of government is a “people democratic dictatorship”, such a policy being meted out by the Chinese government shouldn’t come as a surprise at all.
The country’s constitution affords its citizens freedom of speech and press, but the opacity of Chinese media regulations allows authorities to crack down on news stories by claiming that they expose state secrets and endanger the country.
I feel such a policy is flawed, as it violates the people’s freedom of speech online. As much as I think the policy is flawed, I only agree with the part of the policy that requires sites to take down false information and lies about the government. Of course, we know how false news can gaslight so many negative things which are usually done by some unscrupulous people.
What this new policy insinuates is that everything that will be seen on the Chinese online space would be comments that have been hand-picked by moderators, which will make it hard for individuals in the country to have their voices heard, should they suffer harsh policies or unfair treatment from the government.
Nigeria as a case study, the Endsars protest which started with a hashtag on Twitter degenerated into a protest that got the attention of almost the whole world, one can only imagine the outcome if such policies were implemented in Nigeria. The voice of the people will obviously be silenced, and they will be left to suffer without any attention from international bodies.
It is imperative to know that China has one of the most restrictive media, and its government has long kept tight reins on both traditional and new media to avoid potential subversion of its authority.
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