Asaak, a provider of mobile-based equipment financing for gig workers in Uganda, has partnered with Cauris to establish a $20 million credit facility. Cauris is a global private credit investment firm dedicated to promoting financial inclusion in emerging nations through the use of DeFi blockchain technology. This will be Cauris’ third investment in Africa.

“We are excited to partner with forward-thinking investors like Cauris as we continue to scale our asset financing solutions across Africa. In a continent full of opportunity, mobility is the key to connect and bolster economies. Through this partnership, we’re enabling tens of thousands of individuals to become business owners, bridging the employment gap and driving local economies forward,” said Dylan Terrill, Co-Founder and Chief Business Officer of Asaak.

Asaak, founded in Kampala in 2019, provides asset financing to African gig workers. According to the company, drivers for ride-hailing companies typically spend nearly 50% of their earnings on vehicle rent, are required to return leased motorcycles daily, incur high commuting costs, and have limited access to financing alternatives.

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To address this issue, Asaak leverages its proprietary underwriting technologies to provide drivers with the opportunity to buy their automobiles via “boda” loans. Boda bodas are motorbike taxis that are a common means of transport in Uganda and throughout Africa. 

The company’s technology enables it to evaluate a prospective borrower’s creditworthiness by analyzing thousands of data points, doing digital verification, and making a credit judgment. The organization can then monitor critical borrower data points and use them to promote lending for tangential loan products including fuel loans, personal loans, and smartphone loans. Asaak’s loans are secured by the financed equipment.

Asaak partners with international mobility companies, e-commerce platforms, and credit unions such as Bolt, Safeboda, and Jumia to keep customer acquisition costs low and to ensure a large borrower pool, reliable underwriting data such as customer ratings, trips completed, and money earned, and legal guarantees. 

Thousands of loans have already been made with extremely low default rates. It has also seen phenomenal growth in Uganda thus far. Uganda has one of the highest rates of self-employment in the world, and about 40% of the population is unbanked. This dynamic results in the significant financial vacuum for gig workers that Asaak fills. According to the firm, there is an estimated $100 billion in unmet demand for vehicle financing in Africa’s ride-hailing sector.

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“We are happy to support Asaak in bringing innovative financing solutions to boda-boda drivers and other gig workers in Uganda. We recognize the immense importance of the gig economy in Africa and the significant need for tailored liquidity and financial solutions for this critical element of the continent’s economic activity,” said Azer Songnaba, Chief Investment Officer of Cauris.

Cauris partners with fintechs that are making financial inclusion a reality for tens of millions of consumers and small companies across the Global South — with financings in Africa, Asia, and Latin America. Cauris leverages debt to enable its partners to scale efforts to give historically underbanked people with access to financial services that improve their lives and livelihoods. Cauris intends to leverage Decentralized Finance (DeFi) to facilitate efforts to extend financial services to 100 million people, in accordance with his mission to empower individuals and small businesses through credit; to enable economic growth in emerging markets; and to accelerate the global middle class’s growth.

Asaak mobile Asaak mobile

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

Asaak, a Ugandan asset financing firm, has raised $30 million in pre-Series A loan and equity capital. Resolute Ventures (USA), Social Capital (California, USA), HOF Capital (New York, USA), Founders Factory Africa (South Africa), End Poverty Make Trillions (California, USA) , Decentralized VC, and a number of angel investors were among the new and current investors in the round.

The latest investment continues the increasing interests of investors in asset financing startups in East Africa. Tugende, a leading Ugandan fintech lender that specializes in asset lending in Kenya and Uganda, closed a $17 million investment round at the end of 2021. InfraCo Africa, also recently invested in Uganda’s Zembo, contributing over €3 million to support the company’s electric motorbike business in Kampala, along with a consortium that includes DOB Equity and Mobility 54.

Why The Investors Invested

The startup has generated considerable traction since it was founded. The company has so far subsidized the acquisition of 5,000 motorcycles and has begun supplying the operators with smartphones and fuel funding.

It has also formed strategic partnerships to help it scale, the most notable of which being a deal with Samsung to encourage motorbike taxi drivers to get smartphones. Last month, the company announced a new agreement with Untapped Global, an emerging markets investment firm, to offer financing for over 2,000 motorcycles over the next year.

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The startup is also announcing a new partnership with Standard Bank, a South African bank headquartered in Johannesburg with a presence in 20 African countries, to provide financial services to millions of workers in the informal sector (such as motorcycle taxi drivers) using the startup’s proprietary digital loan origination system. As a result of this partnership, Asaak consumers will have access to customized financial and insurance services.

“While we often underestimate the power of the boda-boda (motorcycle transport) in Africa, in many circumstances, it is an ambulance, a pharmacist, and a chef — it brings you everything you need. It takes children to school, it brings people to job interviews, it provides livelihoods for hundreds of millions of Africans,” said Stanbic Bank, Standard Bank’s operation in Uganda, head of direct digital and e-commerce Aaron Akampa.

“Ultimately, this is new ground for Standard Bank — we haven’t partnered with any other players in this space on the continent yet — it’s the first time we are creating a partnership like this and we can’t wait to see what is ahead,” said Akampa.

Asaak wants to reach six more African markets in the near future as a result of its cooperation with the bank.

A Look At What The Startup Does

Asaak provides motorcycle financing to operators who are frequently turned down by traditional banks because to demanding security requirements such as history history and consistent account activity.

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The company collaborates with a variety of partners, including mobility and e-commerce platforms, to make motorcycle ownership more accessible to riders who make a profession running motorbike taxis (bodabodas), a common mode of transportation in Africa, particularly in big cities like Kampala.

Bodaboda operators can now own the motorcycles they ride thanks to Asaak, whereas earlier, most of them were either employed by bike owners or rented or leased motorcycles.

“Asaak is unlocking mobility-based work, which literally moves the economy forward and creates upward mobility for these individuals. Bodaboda riders are the lifeblood of Africa, moving people and cargo from home to school to work. They just need access to motorcycles which leads them to better income opportunities and makes them able to provide for their families,” Asaak co-founder and chief business officer Dylan Terrill said.

Anthony Leontiev, Edward Egwalu, and Kaivan Sattar are also members of the founding team.

Asaak qualifies riders for motorbike finance utilizing behavioral and financial data from platforms like as Bolt, Jumia, Safeboda, and Uber, such as earnings, trips taken, and ratings.

Asaak produces a credit score for debtors using rider data from these networks. Borrowers can also check their eligibility for borrowing by using the Asaak app or visiting your local branch. Drivers typically receive motorbike financing (about $1,500 in credit) within three days of signing up, with interest rates ranging from 1% to 4% depending on their credit score.

“The more confident that we are with the data that we have to make a lending decision, the less the other requirements they would need to have. We’re trying to make it as easy as possible for people to get loans. But in some cases, yes, it’s necessary (to have a guarantor) and it makes sense from a lending perspective,” said Terrill.

After a time of lending to farmers and SMEs, Asaak, which began operations in Soroti, Uganda in 2016, pivoted its focus to motorbike finance in 2019.

“By financing these types of assets, we’re not just creating a pathway to vehicle ownership, which is good in itself, but we’re creating a stable source of income because of the reliance of drivers throughout the countries that we are in.”

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer