Ugandan startup Asaak, known for providing financing solutions for motorcycle taxi drivers in Africa, has ventured into the Mexican market, marking its first international expansion. Founded in 2016, Asaak originally focused on Uganda’s boda-boda drivers, offering financial support for motorcycles, fuel, and smartphones. It served approximately 1.2 million drivers in Uganda.
Surprisingly, instead of expanding within Africa, Asaak’s CEO, Kaivan Khalid Sattar, chose Mexico as the company’s next destination, despite having no prior presence in the country. This decision was facilitated through the acquisition of the local operations of FlexClub, a South African company specializing in leasing cars and electric motorcycles to gig workers.
Sattar claims that Asaak is the first Ugandan startup to establish operations in Mexico, a market that traditionally attracted Latin American, U.S., and European investors and founders. This unexpected move signifies a growing global interest in Latin America’s fintech sector.
Mexico’s favorable business environment and stronger adherence to the rule of law compared to Uganda played a pivotal role in Sattar’s decision. The acquisition of FlexClub granted Asaak immediate access to 150 electric motorcycles, allowing for rapid deployment. Notably, the majority of motorcycles sold in Mexico in 2022 were utilized for work, primarily by platform workers.
Despite the significant difference in GDP per capita between Mexico and Uganda, both markets share a common challenge—high credit interest rates and limited access to credit for the unbanked population. Asaak aims to address this issue by offering gig workers in Mexico a financing model similar to its Ugandan operations, enabling them to acquire essential tools for their jobs, such as smartphones and vehicles.
Gerardo Gómez Gálvez, general director and country manager at J.D. Power, suggests that Asaak could establish a successful electric motorcycle business in Mexico by partnering with fleets, following a strategy initially employed by FlexClub. However, FlexClub faced challenges replicating this approach and eventually closed down.
As Asaak transitions from e-bike loans to opening credit lines for gig workers in Mexico, Javier Serrano, former business operations manager at FlexClub Mexico and current general manager of Asaak Mexico, remains cautiously optimistic about the prospects of the electric vehicle industry in the country. He believes that with Asaak’s entry, it may be worthwhile to revisit experiments in this domain.
| Key Points |
|---|
| Asaak, a Ugandan startup, expands its operations to Mexico. |
| The move was facilitated through the acquisition of FlexClub’s local operations. |
| Mexico’s business environment and rule of law appeal to Asaak’s CEO. |
| Asaak aims to address the challenge of high credit interest rates in Mexico. |
| The company plans to offer financing solutions for gig workers in Mexico. |
| Asaak’s entry signals growing global interest in Latin America’s fintech sector. |
