With a focus on growing across Africa, Fido, a fintech business with its headquarters in Ghana, has raised $30 million in a Series A round of funding.
Fido, a fintech company with headquarters in Ghana, has raised $30 million in a Series A round of fundraising with the goal of expanding throughout Africa.
Since 2015, fintech startup has provided credit via mobile phones to thousands of users. This year, it plans to expand into Uganda and other parts of the continent by adding savings and payment products to its portfolio.
In addition to its Israel office, the fintech is also planning to construct a second research and development facility in Ghana’s capital city of Accra. This will enable it to automate the majority of its operations and assure long-term viability.
Fido CEO, Alon Eitan said, “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.”
The company just raised $30 million in equity funding and an undisclosed amount in debt finance in a Series A round led by Israel-based private equity fund Fortissimo Capital, with participation from Harvard alumnus-led venture capital fund Yard Ventures. With this, $38 million has now been raised in equity investments overall.
“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.
Fido, which was founded by Nadav Topolski, Tomer Edry, and Nir Zepkowitz, provides mobile loans up to $250 to individuals and small businesses. These loans are repayable by a single payment or a series of payments over a maximum six-month period.
Eitan claims that since digital registration for a Fido account just takes ten minutes, customers may easily set one up. Customers must upload copies of their identity cards and headshots in order to register. These documents are verified by Fido’s image recognition model and cross-referenced against databases. According to Eitan, multiple-step authentication stops fraud.
He continued by saying that the fintech uses credit-scoring tools to decide how much money it may offer to potential 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 the fourth one. We also have models around fraud too,” he said.
According to Eitan, the fintech has so far approved 340,000 Ghanaian customers for 1.5 million loans totalling $150 million. This sum is anticipated to increase as it expands into further African markets, beginning with Uganda.
“Ghana and Uganda are similar in many aspects, and we are extremely familiar with the rules. In our opinion, the market is very large in terms of both the population and the use of mobile devices. There are approximately nine million mobile accounts in Uganda, so it’s crucial for us to enter a developed market because it enables us to rapidly deploy our services, which is what we truly want to achieve, he said.
The 65-person team behind Fido includes digital debt collectors who, according to Eitan, follow up on unpaid debts in an ethical manner.