Uganda fintech startup, Numida, has raised $12.3 million in its pre-series A funding round, which was led by Serena Williams’ Serena Ventures. The funding round also has support-investment from Breega, 4Di Capital, Launch Africa, Soma Capital, Y Combinator, and MFS Africa.

Along with the $12.3 million fundraise, the startup will also be getting $5 million in form of a debt facility from Lendable Asset Management.

With the funds, Numida said it will be expanding out of Uganda, into other African countries like Nigeria, Ghana, Egyptian and Kenya. The startup will also target the funds towards extending more loans to an additional 10,000 businesses – which will push it to hit its 40,000 targets within the next 18 months.

“I’m most excited about continuing to build and provide financial products for these micro and small business owners who have been forgotten by the traditional financial services industry even though they are hardworking and have viable businesses. There are so many of these businesses across the continent, we really do believe that we’ve proven a model in Uganda that can be Pan-African and unlock the potential of these businesses to growth and achieve great things,” Numida co-founder and CEO, Mina Shahid, said.

Numida was co-founded in 2017 by Mina Shahid, Catherine Denis, and Ben Best. The startup provide loan facilities to SMEs – which usually find it difficult to get loans from commercial banks due to lack of collaterals. Numida provide loans of between $100 to $5,000, at an interest of 10% – 16%, which is payable after one month. The startup claims that it does risk-based pricing when calculating its interest, and usually have interest around 11.5%.

“When we started building this business, we saw that a lot of people were getting taken advantage of because they didn’t really understand the user terms because most people don’t actually read these privacy policies or user agreements to understand what they were giving up. And so, we wanted to be very conscious about our approach, and we only ask for information that helps us determine if it is a business and if the person applying for a loan is the owner of the business. […] The information we use is the one provided by the customer on the app, so we don’t snoop or scrape any data. We have a bunch of historical data that helps determine whether or not the information we’re collecting is relatively in the right ballpark,” Shahid said.

Since Numida began operations, the startup claims that it has provided more than $20 million in unsecured working capital to 27,000 micro and small businesses, and with the newly raised funds, it plans to increase its offerings, while going across borders.

Speaking on the fundraise, Alison Rapaport Stillman, General Partner at Serena Ventures, said in a statement:

“While we’ve spoken to countless fintechs in Africa who claim that their end game is to provide financing to small businesses, Numida is already doing it. We’re impressed by the strength and commitment of Numida’s team and their methodical approach to solving a very complex problem – how to give a $500 loan to a business that has no collateral, operates in cash and is semiformal. We are excited to join their mission to unlock the potential of these businesses across the continent.”

Numida raised $2.3 million in April, 2021, and has since increased its female users from about 33% to 50%. This, the startup claims it did by building trust among the female entrepreneur community.