Winner of the 2020 LHoFT Catapult Africa awards Hilda Moraa talked about raising $11m for her SME finance enabler Pezesha.
Five years after founding the embedded finance platform Pezesha, you raised $11m in pre-Series A. How did you do it?
It’s been a lot of hard work, really putting the right team and structures in the right business model. It’s all coming together right now and proves that our business model works. In the midst of the current recession we’ve been able to prove those three components work, sustainably and that we have the possibility to grow. That’s the formula for getting the right investors.
The equity-debt round was led by Women’s World Banking Capital Partners II, which is an initiative of the European Investment Bank. Did your time in Luxembourg have a role in facilitating the contact you formed there?
Not at all. We’ve been very lucky to engage in the local ecosystem in Kenya, where we have an office. They’re the ones who reached out to us through their team in Kenya. They’re really excited about our embedded finance model, which is something they believe in as part of productive lending to small businesses. It’s great that they are connected to Luxembourg and a lot of investors there. We feel very lucky and like we have been intentional with the investors we’ve been able to attract in this round.
How has your startup benefited from the Catapult Africa programme?
I think for me it’s getting to meet the right people, the right entrepreneurs solving big problems like we do here in Africa. Getting to understand where that peer network is. One of the biggest values is that catapult does a great job bringing the right people to the table. Beyond that it’s strategic partners, capital providers for potential capital partners. I think that’s one of the bigger potential partnerships, we had a lot of interest in both debt and equity from the Catapult networking sessions. Some of them we are potentially looking to work together in future. Those things stand out and the ability to learn from other entrepreneurs who have solved these problems, the challenges they faced and how they overcame them is really powerful in that platform.
“One of the biggest values is that catapult does a great job bringing the right people to the table”
Hilda More, founder and CEO of Pezesha
Can you give us a snapshot of life on the ground in Kenya and the ecosystem there?
It’s quite an exciting time. We’ve a new government who believes in SME financing and working with small businesses, so we’re positioned right at the centre of that. We’ve a lot of opportunities looking at current market challenges, we’re helping small businesses to survive. At the end of the day, the market is controlled by small businesses and they control the economy of Kenya and every other African country. We sit at the centre, solving their problems, helping them to build their credit history and educating them on how to do that with our tools and digital products. That is really where we see a lot of opportunities. Of course, notwithstanding the fact that the majority of these businesses cannot get credit from the bank, especially in these tough times. From a global economic view, global impacts are still trickling down to the Kenyan economy. So, we see banks restricting capital only to big businesses that have collateral, which is not the world we work in. The majority of businesses we work with have no collateral or credit history, we’re building it for the first time. It takes one SME at a time, but with the current resources we’ve received I believe we will be able to move more quickly to work with men and women and solve this financial inclusion problem.
Do you have a diversity and inclusion remit?
Intentionally we’ve tried to make sure that women are included because that’s the majority of excluded communities. The majority of our customers are women. We’ve worked with partners to reach out to women-run SME businesses, which is exciting because now more than ever we’ve been able to give them access to affordable credit. Because of our penetration into new markets like Ghana and Uganda, we’ve seen that increase. And we’ve seen that the majority of the businesses in the rural market of those countries are run by women. By that virtue, with our partners, we’ve been able to reach more women through strategic partnerships.
What is your advice for budding fintech startups that are women-led?
It’s tough being a woman in this space, especially fintech. There are a lot of mountains to climb. Some of them might be really hard and you will need a support system so get a support system that really believes in you to help you climb those mountains. That support system should be there to guide you in a way that builds your confidence up that mountain. I’ve seen the value of having a strong support system, and having mentors who have supported me in areas I don’t know about.
And be coachable. That has really helped me even when to everyone in the room it might seem like I know it all, in most cases I don’t. The support system helps you build that knowledge and have that confidence in what you’re doing. Get a support system which works with you in this journey. Because it’s tough and it only gets tougher as you scale and go to new markets.
As you continue to look for fundraising in this current environment and find the right talent to help you scale, they’re all complicated and get bigger as you scale. If you have a support system, it doesn’t have to be people in the industry with experience. It can be other entrepreneurs who have gone through these challenges, both men and women, who can help.
