Digital lender FIDO Solutions has secured a $10 million equity investment from FMO, the Dutch development bank, as part of its Series B capital raise. The funding is intended to bolster FIDO’s loan operations in Ghana and Uganda, while also facilitating expansion into new markets in Africa. FIDO, which operates in both countries, provides small-ticket, short-term loans to individuals and small businesses, many of whom have no access to traditional financial services.
Founded in 2016 by Israelis Nadav Topolski (chairman of Reshet Channel 13), Tomer Edry and Nir Zepkowitz, FIDO leverages alternative data and artificial intelligence (AI) to provide instant credit decisions, bypassing the need for formal financial records. The company has already served over 650,000 customers, and the new funding will enable it to expand its reach, especially among underserved populations at the bottom of the pyramid (BoP).
FIDO’s operations target individuals and small business owners who have traditionally been excluded from the financial system. Its client base is primarily composed of young, informal entrepreneurs who lack formal credit histories. CEO Alon Eitan said, “We are not just improving accessibility to financial services, but we are also making them better — faster, simpler, and more transparent.”
In regions where banking services are slow, bureaucratic, and limited in reach, FIDO’s digital platform offers an alternative. The company’s automated system uses advanced machine learning models to process hundreds of thousands of data points, allowing it to make real-time lending decisions. Customers, even those with no previous credit history, can receive loans within minutes.
FMO’s $10 million investment was made through its MASSIF fund, which is focused on reducing inequality by supporting financial inclusion. FMO views FIDO as a key player in providing finance to BoP clients, in line with the bank’s commitment to reaching underserved populations.
FIDO’s recent $10 million funding round follows its successful Series A raise of $30 million in 2022, which was led by Fortissimo Capital.
The rise of fintech companies like FIDO underscores the growing importance of technology in transforming the financial landscape in Africa. By offering fast, accessible, and transparent financial services, FIDO is helping to bridge the gap left by traditional banks, fostering entrepreneurship and economic growth in the process.
FIDO’s plans include further geographical expansion and the introduction of new financial products aimed at helping customers better manage their finances. The company’s technology-driven approach could serve as a model for financial inclusion across the continent, as it seeks to create a more inclusive financial ecosystem for Africa’s underserved populations.
With the backing of FMO and other investors, FIDO Solution’s continued growth is likely to have a lasting impact on the financial accessibility and economic empowerment of millions across Africa.
Editor’s Note:
On September 4, 2024, Fido announced that it raised $30 million in Series B debt-equity funding. The new capital includes a $20 million equity investment from global impact investment manager BlueOrchard and Dutch entrepreneurial development bank FMO. This funding will support Fido’s plans to expand into new markets in East and Southern Africa.