Cash flow is a big problem for small businesses in Africa. Long payment cycles, services or products can take up to 30-90 days after delivery, and with little or no capital, 85% of African small and medium-sized businesses are subject to cash flow.
Many beginners are solving these problems for African SMBs in one way or another, and the demand for their services has seen the beginnings of Ghana. Floating Receive significant financial support. Fintech, which provides credit lines to businesses, has raised $ 17 million, which will be used to strengthen its supply chain and expand it geographically.
The seed cycle was a mixture of $ 7 million equity and $ 10 million debt. While Couris Presented by Debt Financing, Tiger Global and JAM Fund, co-owned by Justin Martin, the founder of Tinder, are joint ventures. Other VC companies involved in the equity round include Kinfolk, Soma Capital, Ingressive Capital and Magic Fund.
Two Angel Investors also participated in the event Y Combinator CEO Michael Sebel, Horizon Partners Sandy Cory, Ramp Founders Karim Atieh and Eric Glyman, Pharma Gregory Rockson and Dutch Founders Zach Lipson and Ross Lipson.
General Manager Jesse Gansah He started the company formerly known as Swap Barima Effah A.D. In 2020, and again following the branding float, it continued broadcasting in June 2021. YC-sponsored Ghana Fintech Tech at OMG Digital, a media company, joined YC in 2016.
“We need credit and we started making profits from our long-term partner bank, which we traded for over $ 100,000.
“I also remember that I borrowed money, sometimes up to 20% a month, to pay off the sharks’ loans. That prompted me to solve those problems with Flaat.
More than 51% of the 44 million regular SMBs in sub-Saharan Africa face the same problem as those who need more funding than they can afford. Research. Floating provides some of these businesses with loans from traditional banks.
In addition to flexible credit lines for businesses to cover cash flow gaps, Float has software for businesses to manage accounts and wallets in one dashboard, as well as automate invoices, suppliers or suppliers’ payments and invoices. The company aims to serve as a “financial operating system” for small and medium-sized businesses in Africa.
Other features on the platform include invoice, account opening, payment links, budget management and expense cards.
The company has recently introduced some additional features that include revenue growth and faster payments. With the latter, floating small businesses need to take advantage of the platform rather than spend their earnings quickly. Invoice helps businesses with invoice receipts grow financially.
Gansah said all of these characteristics provide different types of loans to various industries and regulators across the continent.
“The biggest challenge is that business lending needs are very diverse. Retail interest needs are very different from the lending business of services or agriculture, business or pharmaceutical or medical supplies,” he said.
“So we are trying to find out which loan products are working for a particular firm. And that is what we have been working on so far,” he said.
In the seven months since its inception, Float has run hundreds of businesses in a wide range of industries – retail and manufacturing, fintech, e-commerce, media and health.
Floating $ 10 million in loans and financial losses to businesses. The company said it had increased its transaction volume (billing and supplier fees) by eight digits, 26x.
Fintech Tech is not the only African newcomer that plans to become an operating system for small and medium enterprises in the region. Prospa, Brass and Sparkle are just some of the startups that provide cash flow support and software services to businesses.
It states that each company does not view the others as competitors; First, all parties believe that the market is large enough to accommodate them. Second, there is a sense of superiority in their products – even if they do not say so publicly.
For Flaat, it prides itself on providing financial and software services to businesses at the same time. And then more flexible loans by providing easily available flexible and short-term working capital.
“I think one part of identifying ourselves is how flexible our credit is, in terms of accessibility, and how quickly credit is declining,” Ganshah said. “And then, it’s just a matter of how you spend it for just one day and then pay for it the next day.”
Gansah said in a statement that the float in Ghana and Nigeria had received permission to use the new capital in Q2 in Kenya and South Africa.
The company will use the investment to improve its financial management platform and launch new loan products for specific businesses and industries.
“It has launched a mission to provide additional cash flow and cash flow to help millions of businesses on the continent grow and reach their full potential,” the statement said.
“With this new funding, we will continue to refine both our credit and software products to provide the best practices for our fast-growing customer base. We look forward to being a growth partner for businesses in Africa.”
Sumber artikel : https://techcrunch.com/2022/01/17/ghanaian-fintech-float-raises-17m-seed-to-power-cash-flow-for-commerce-in-africa/
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