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Pan-African fintech Pezesha has raised pre-series A investment of $11 million – a mixture of $6 million in equity and $5 million in debt. The funding round, led by Women’s World Banking Capital Partners II, will see the start-up scale operations in its core markets while growing into new markets within Sub-Saharan Africa.
Pezesha, which means “capital enabler”, offers a B2B digital lending infrastructure focused on providing affordable working capital to financially excluded SMEs. This sector is estimated to face a $328 billion financing gap.
It was founded in 2017 by Hilda Moraa, a second-time fintech entrepreneur who exited her first fintech business in 2015. Pezesha will use the proceeds of the latest investment to grow its presence in East Africa and expand its digital lending infrastructure in West Africa.
With a head office in Kenya, Pezesha has been focused on solving hard infrastructure problems that exclude MSMEs in the so-called “missing middle”. By bridging the MSME information gap and mending fragmented value chains, Moraa says it has become a leader in embedded finance in Africa, offering productive credit to tech-enabled platforms such as Twiga Foods, Jumia and Marketforce, among others.
Partners integrate with Pezesha’s APIs and offer credit, among other financial services, to its merchant network at the point of sale. Pezesha’s credit scoring APIs act as the engine of a simple but robust process where MSMEs receive real-time loan offers to purchase stock and pay later.
Pezesha also offers financial literacy courses and debt counselling to MSMEs who do not qualify for loans in order to improve their credit scoring and ensure responsible borrowing as they grow within the Pezesha financial ladder.
In the last two years alone, Pezesha has grown the value of its disbursements over 2 000% through disbursement of more than 100,000 loans to MSMEs in Kenya, Uganda, and Ghana.
Moraa says, “We are excited about attracting institutional investors led by the Women’s World Banking Capital Partners II to harness our growth plans and push our mission to the next level. We are equally excited that WWBCP II intentionally invests in women, which allows us to cement inclusivity in our growth plans as a sustainable path towards our vision of building Africa’s MSME lending infrastructure.
“Additionally, this round has brought together strategic investors who underpin the fundamentals of financial inclusion in their thesis and we believe these combined experiences will help us accelerate and enable millions of MSMEs across African value chains to access affordable working capital.”
Women’s World Banking Capital Partners II chief investment officer Christina “CJ” Juhasz adds, “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. We look forward to teaming up with Pezesha as it drives financial inclusion in Africa and continues to increase the number of women served in its business ecosystem.”
WWBCP II is the second gender-lens investment fund established by US-based non-profit organisation Women’s World Banking and managed by WWB Asset Management. The fund aims to close the gender gap by investing in high-performing financial service providers that serve low-income women with a dedicated technical assistance facility to help portfolio companies achieve strategic objectives toward gender inclusion.
Pezesha is also opening up the debt liquidity market by working with strategic institutional investors such as IOG-Cardano. Through this partnership, the start-up can access affordable capital by layering DeFi liquidity channels on top of the scalable digital lending infrastructure.