Fintech Fido raises US$30m equity investment for continental expansion

GHANA – Fido, a fintech company that has been extending credit to thousands of customers via mobile phones since 2015, has raised a US$30 million equity investment and some undisclosed debt funding in a Series A round.

The round was led by Israel-based private equity fund Fortissimo Capital, with participation from Yard Ventures, a VC fund founded by Harvard alumni. This takes the total equity investment raised to US$38 million to date.

“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 said.

“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.”

Fido will use the funds to add savings and payment products to its portfolio later this year, as well as enter Uganda, its second market, as it plans to expand throughout the continent.

The fintech is also planning to create a second research and development facility in Ghana’s capital, Accra, to supplement its Israel office and enable it automate most of its processes in order to ensure long-term viability.

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,” he said.

“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.”

Since its inception, the firm has gained significant traction. Eitan stated that the fintech has made over US$1.5 million in loans to 350,000 Ghanaian customers. This figure is expected to rise as it expands into other African markets, beginning with Uganda.

“We are truly impressed by the team’s [Fido’s] ability to underwrite people instantly while delivering sustainable economics. This differentiates them from the other players in the space,” Fortissimo Capital partner, Yochai Hacohen, said in a statement.

“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.”

Fido, founded by Nadav Topolski, Tomer Edry, and Nir Zepkowitz, provides consumers and small businesses with mobile loans of up to $250. The loans are repayable in single or multiple instalments over a six-month period.

Fido is backed by a team of 65 personnel, including digital debt collectors who, according to Eitan, use ethical methods to follow up on late repayments.

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