Ugandan fintech startup Fin-e Innovations raises $300,000 to bridge funding gap of African energy SMEs
Fin-e Innovations, a fintech start-up based in Uganda, has closed pre-seed funding of $300,000 from an undisclosed party in the United States. The company intends to address the glaring financing gap among local energy SMEs in Africa through an innovative platform connecting last-mile distributors (LMDs) directly with investors.
This platform offers different advantages such as reducing investment risk, speeding up the investment cycle, and allowing for small ticket size investments. The company will now run its pilot in Uganda, home to a buoyant energy SME eco-system, and later replicate and scale in other African countries.
Small and Medium Enterprises (SMEs) are the economic backbone of virtually every economy in the world. According to the World Bank, SMEs represent more than 95% of registered firms worldwide, account for more than 50% of jobs, and contribute more than 35% of Gross Domestic Product (GDP) in many emerging markets. Yet, in terms of financial support, they attract the least funding.
Frank Neil Yiga, Co-founder, Fin-e Innovations: “Any local founder in a given developing country knows first-hand the pain of raising any type of funding beyond the expected family and friends. Moreover, not many local energy companies have the internal expertise to write successful proposals for funding, later on meeting the complex due diligence requirements most funders ask for. Fin-e is coming into this space to decentralize financing for early-stage local energy companies in Africa.”
Now, more than ever, all energy sector players need to adopt an all-hands-on-deck approach if the goal of achieving universal energy access by 2030 is to be attained. According to UOMA, 95% of the sector funding goes to big international firms.
Fin-e intends to address this anomaly by on-boarding local SMEs in Uganda and other African countries on the platform and taking their deals directly to investors and donors. This solution will enable the local SMEs build their own track record and relationships directly with investors for future funding needs.
Emmanuel Bukenya, Co-founder, Fin-e Innovations: “Investors and donors alike will have a fresh experience of last-mile energy deals transparently curated to their investment goals and needs through our dashboard. Our dashboard will save investors both money and time on long and complex due diligence processes, thereby unlocking more funding into the sector.”
Fin-e Innovations estimates that 10,000 new jobs could be created thanks to the platform as solar projects and installations are championed and implemented by local SMEs, resulting in 2 million new solar connections facilitated by the platform in Uganda alone by 2030.
Fin-e Innovations’ choice of starting piloting operations in Uganda is informed by their hands-on experience of the market, as well as a deep & wide network of supporters.