Ghanaian Fintech float raises $17m to enable cash flow for trade in Africa
Ghanaian startup Float, a fintech that provides lines of credit to businesses, has raised $17 million, funding it will use to bolster its offerings and expand geographically.
The seed ride was a mix of $7 million in equity and $10 million in debt. While cowries provided debt financing, Tiger Global and JAM Fund, the investment company of Tinder co-founder Justin Mateen, co-led the participation. Other venture capitalists involved in the round include Kinfolk, Soma Capital, Ingressive Capital, and magic fund.
A few angel investors also participated: CEO of Y Combinator Michael Seibel, Sandy Kory of Horizon Partners, Ramp Founders Karim Atiyeh and Eric Glyman, Gregory Rockson of mPharma and Dutchie founders Zach Lipson and Ross Lipson.
In addition to flexible lines of credit allowing companies to cover cash flow gaps, Float also offers software tools allowing companies to manage accounts and portfolios in a single dashboard, as well as automate invoices, payments suppliers or vendors and bill collections. The company aims to serve as a “financial operating system” for African small and medium enterprises.
Other platform features include invoice advance, business account opening, payment links, budget management, and expense cards.
The company also recently introduced other features: revenue advances and instant payments. With the latter, Float wants small businesses to use its platform to tap into their revenue instantly instead of using gateways, which take days to set up. Its invoice factoring helps companies with unpaid invoices obtain cash advances.
Ghansah said all of these features provide different forms of credit for various industries and verticals across the continent.
“The great challengeenge is that the credit needs of companies are very different. Retail credit needs are very different from the credit needs of a service business or the credit needs of agricultural, commercial, or pharmaceutical or medical supply businesses.“, said the general manager.
“So we try to thoroughly determine which credit products work for certain verticals. And so that’s what we’ve been working on so far.”
In the seven months since launching Float, the cash flow and expense management platform has onboarded hundreds of businesses across a wide range of industries: retail and manufacturing, fintech, e-commerce, media and health.
Float, which has operations in Ghana and Nigeria, intends to use this new capital to set up entities in Kenya and South Africa by the second quarter once it has obtained operating licenses, said Ghansah on the call.
The company will also use this investment to enhance its cash management platform and launch new credit products tailored to specific sectors and business sectors.