Pezesha, a Nairobi-based embedded finance fintech, has secured $11 million in a pre-Series A equity-debt round headed by Women’s World Banking Capital Partners II, with participation from Verdant Frontiers Fintech Fund, cFund, and Cardano blockchain maker Input Output Global (IOG). Talanton and Verdant Capital Specialist Funds also contributed $5 million to the transaction.
Following the financing, the business intends to grow into Nigeria, Rwanda, and Francophone Africa.
The fintech’s new expansion strategy builds on its ambition to expand its embedded finance offering beyond its present markets, which include Uganda and Ghana, in order to overcome the financial gap that affects millions of micro, small, and medium-sized firms (MSMEs) in these countries.
Why The Investors Invested
Since its inception, the firm has gained significant traction. Pezesha stated that it is presently working with over 20 partner firms to give loans to over 100,000 enterprises. This figure is expected to rise by the end of the year when an additional ten enterprises integrate with its infrastructure.
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“Facilitating the movement of capital into emerging markets to support economic growth and job creation is a core promise of blockchain and cryptocurrencies. Our vision is centered on using technology to make it easier for people across the globe to borrow and lend to each other in a regulated way. This investment in Pezesha is an important milestone, and we’re excited to be a part of their growth story,” Charles Hoskinson, the co-founder of IOG and Cardano, said.
The IOG’s investment in Pezesha follows an earlier statement that the two firms will collaborate to construct an African peer-to-peer financial operating system.
“Pezesha is dedicated to solving Africa’s working capital problem through its robust lending infrastructure, and this investment will allow them to deepen the range of financial products offering especially to women owned MSMEs,” said Christina “CJ” Juhasz, the chief investment officer of Women’s World Banking Asset Management.
Pezesha did not disclose previous funding amounts, however Moraa highlighted that 20% of its initial pre-seed investment in 2017 came from local angels. Seedstarts, GreenHouse Capital, and Consonance Investment Managers are among the investors in the fintech, which raised seven figures last year.
A Look At What The Startup Does
Hilda Moraa founded Pezesha in 2017 with the goal of creating a scalable digital lending infrastructure that allows both traditional and non-traditional finance institutions to supply working capital to MSMEs.
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“The opportunity and impact in solving working capital problems for SMEs is huge. [We are] solving the root cause, which is information asymmetry issues, to ensure quality and responsible borrowing. Pezesha solves this through our robust API driven credit scoring technology,” Moraa said.
The fintech collaborates with partner firms such as Twiga and MarketForce, which integrate its credit scoring APIs into their platforms to provide real-time loan offers to its consumers.
The fintech may provide loans of up to $10,000 with interest rates in the single digits and a one-year payback term.
Pezesha intends to provide $100 million in funding to enterprises each year by leveraging local and international banking institutions, high-net-worth people, and decentralised finance.
“We are building for the future and this means tapping new innovations for additional liquidity that allows us to offer affordable loans to SMEs,” Moraa, a two-time founder who founded Pezesha after departing Weza Tele in 2015, said.
The fintech intends to expand loan alternatives for women entrepreneurs who are now excluded from the official banking system.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh