Fido, Ghana-based fintech that offers credit to thousand of customers over mobile phones in the quest for growth avenues and expansion across Africa has received a backdrop of $30 million equity investment and some undisclosed debt funding in a just-concluded Series A round led by Israel-based private equity fund Fortissimo Capital, with participation from Yard Ventures; a VC fund by Harvard alumni. This brings the total equity investment raised to date to $38 million.
Introducing Savings and Payment Products
As it gets ready to expand to more regions across the continent, Fido disclosed that it has plans to introduce savings and payment products to its portfolio later this year as well as enter Uganda, its second market. The Fintech is also planning to establish a second research and development center in Ghana’s capital, Accra, to augment its Israel branch and help it automate most of its operations to ensure long-term sustainability.
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“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 revealed.
“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.
Getting Started with Fido in 10 Mins
Founded by Nadav Topolski, Tomer Edry, and Nir Zepkowitz, Fido offers mobile loans to individuals and small businesses of up to $250. The loans can be repaid in a single or multiple installments of up to six months.
Fido makes it easy for customers to set up an account in only about 10 minutes. Customers are required to upload copies of their identity cards and headshots to register. These documents are validated by Fido’s image recognition model and cross-referenced against existing databases. According to Eitan, multi-step authentication eliminates fraud.
He continued by saying that the fintech uses credit-scoring technologies to decide how much money it may lend to potential borrowers.
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“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.
Expanding Across Africa
Eitan said that the fintech has offered over $1.5 million loans to 350,000 customers in Ghana. This sum is estimated to grow as it enters more 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.
A team of 65 people supports Fido, including digital debt collectors who, according to Eitan, follow up on late payments using ethical methods.
“We are really impressed by the team’s [Fido’s] ability to underwrite individuals instantaneously while delivering sustainable economics. This sets them apart from the other players in the industry,” Fortissimo Capital partner Yochai Hacohen said in a statement.
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“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 added.
