Emata, a Uganda-based fintech and microfinance institution, has completed $2.4 million in a seed funding round. The fund constitutes $800,000 in equity and $1.6 million in on-lending capital. According to the startup, the fund will aid in the expansion of its agri-loan offerings across the East African region.
In a statement sent to Technext, Emata’s seed raise was supported by a handful of investors. One is African Renaissance Partners, a VC firm keen on supporting entrepreneurs within East Africa and the Horn of Africa. Another backer is Norrsken Accelerator, an investment arm of Europe’s biggest impact tech ecosystem. Other investors include Zephyr Acorn, Marcus Boström, and the Draper Richards Kaplan Foundation.
Emata operates a business model that caters to the dearth of agricultural financing in East Africa. It does this by giving automated loans to farmers. Doing this lessens the cost of obtaining loans. For instance, farmers access loans from Emata at a rate that is five times more affordable than the informal loans that have been their go-to option for many years. What’s more, farmers enjoy instant disbursement without the hassle of providing collateral.
Speaking on the fundraising, Founder and CEO, Bram van den Bosch expressed delight. He said: “We are thrilled to complete our $2.4 million seed fundraise, backed by high-profile, impact-oriented investors who recognize the huge potential of digital agri-loans in East Africa, and beyond.”
He further shed light on Emata’s mission which is to enable farmers to have big dreams. He added that his startup helps farmers by removing the common hurdles that have made it difficult for the majority of farmers to access agri loans. Describing his company’s offering, he said “Our solution turns a lifelong struggle into a five-minute process, and is already tangibly impacting thousands of East African farmers.”
As mentioned, Emata’s next move is to expand its market solutions. The next stop for the fintech startup is most likely Tanzania, a neighbouring country of Uganda, the company’s base of operations. Emata will concentrate on growing the dairy and coffee markets while extending attention to potatoes.
Despite being less than five years old, Emata has attracted global attention. At the 2023 Global Startup Awards, it received the “Best Newcomer / Best New Startup” award ahead of 80,000 entrants from across the world. It also made it into Yale Africa Startup Review’s list of 30 startups to watch in 2023.
Emata also had a great outing in 2022 as it recorded a seven-fold year-on-year growth. It also increased its pool of partners to 50, connecting with 40,000+ farmers and dispensing loans worth $1 million.
What Emata investors think
Magdi A. Amin, Managing Partner at African Renaissance Partners remarked “We are delighted to back Emata – the digital and affordable solution for East African farmers. Our portfolio is geared to high-growth companies that use technology to solve real problems that Africans face every day.” He added that the startup has a bright feature and was excited to work with the startup’s team.
Kanini Mutooni the Managing Director of Draper Richards said that Emata was among the rare breed of early-stage startups with an amazing business model. Justifying Norrsken’s decision to invest, Alex Bakir, a General Partner said “Norrsken Accelerator invested in Emata because we believe their team and model places them in the top 1% of impact companies, globally.”
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