Ghana’s Fido Raises $30 Million In Series A Funding To Fuel Its Expansion Plans And Roll Out New Products

Ghana’s fintech startup Fido has raised $30 million in equity investment in a Series A funding round led by Isreal-based private equity fund Fortissimo Capital. The funding round also received participation from Yard Fund, a venture capital fund founded by Harvard alumni. Fido also raised undisclosed debt funding. Following the funding round, the total equity investment raised by the fintech runs into a total of $38 million.

Fido, over the years, has provided credit facilities to people via their mobile phones since it appeared in 2015. It was founded by Naday Topolski, Tomer Edry and Nir Zepkowitz. The fintech provides mobile loans of up to $250 to individuals and small businesses. It allows customers to make repayments either through a single payment or multiple installments for a period of up to six months.

Fido plans to roll out new products and also expand across Africa and the newly-raised funding will help fuel that. The new products that the fintech plans to launch this year include savings and payments products and they would be added before the year runs out. On expansion, Fido Uganda is the top on the list of countries that it plans to enter. There are also plans to open a second research and development center in Accra, Ghana to complement its branch in Israel. The startup says this will help ensure sustainability in the long run.

According to CEO Alon Eitan, “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.”

He also went on to explain that “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.”

The CEO also claims that potential users will be able to set up a Fido account in as quick as ten minutes. Fido relies on credit-scoring technologies to decide the number of loans to issue to people. “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 added.

According to Fido’s CEO, the fintech has issued more than $1.5 million in loans to at least 350,000 customers in Ghana and hopes to grow this number as it sets out into Uganda and other African territories.

Speaking on the Ugandan expansion, the CEO said that “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.”

“We are truly impressed by the team’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,” Fortissimo Capital partner, Yochai Hacohen, said in a statement.