Zanifu, a Kenyan fintech offering inventory financing to micro, small and medium-sized companies, has raised $11.2 million debt-equity funding in a pre-Series A spherical led by Beyond Capital Ventures and Variant Investments. Founders Factory Africa, AAIC Investment, Google Black Founders Fund, and present investor Launch Africa additionally participated in the spherical. This brings complete debt-equity funding raised by the startup to $12.7 million.
The fintech offers inventory credit score to retailers, and the brand new funding will allow it to increase the answer to distributors too, the startup’s co-founder and CEO Steve Biko instructed TechCrunch.
Zanifu targets companies that discover it arduous to entry credit score from formal monetary establishments for lack of construction, accounting books and belongings that can be utilized as collateral, Biko stated. Yet, these companies require credit score the to maintain their operations and/or to increase their companies. Zanifu extends credit score to the companies primarily based on information it collects from them, and their suppliers. The fintech de-risks the road of credit score by straight paying their suppliers.
“In our first product, we only lent retailers to help them expand their business, but we found out that distributors have a similar problem,” stated Biko.
Stock financing varies primarily based on the dimensions of the enterprise, however distributors can entry up to $10,000, whereas retailers get items whose value ranges from $200-$500. The startup says it has to this point given credit score to 13,000 micro-businesses, and has already served 500 distributors following the enlargement of its buyer base.
A 5% – 6% curiosity is charged month-to-month, and, to this point, a 99.2% compensation price has been reported owing to numerous elements together with Zanifu’s underwriting algorithm which, Biko says, has gotten higher over time.
Its clients use an android software to know their credit score restrict, and make orders. The fintech has built-in a number of fee channels into the app to facilitate swift repayments. It additionally allows retailers to pay for inventory purchased from different distributors not included in its database.
“We found out that most of these retailers, especially in this market, have multiple distributors. And we increased their limits and allowed them to pay any of their distributors,” he stated, including that Zanifu is constructing a platform for distributors to replace their inventory preserving models.
Following the brand new funding, the startup plans to scale its operations in Kenya, shelving its earlier plan to increase to Ghana, and Uganda – a few of the markets the place small companies additionally discover it arduous to increase capital for his or her operations, and development. Around Africa, small enterprises are financial drivers with research exhibiting that they make up almost 90% of companies in the continent, and contribute considerably to job creation. It is estimated that Kenya has a $19 billion financing hole for MSMEs.
Other firms serving the credit score wants of those enterprises in Kenya embrace Pezesha, and Standard-Chartered Ventures-backed Solv.
“We have decided to go deep in Kenya. We are focusing on serving more micro-SMEs and also getting more distributors into our fold, and ensuring the capital we are dispersing is actually generating returns for these businesses and helping them grow. So that’s really how we’re looking at it for now. We will go to other markets once we get to profitability,” stated Biko, who co-founded Zanifu with Sebastian Mithika.
The fintech, which is licensed by the Central Bank of Kenya, plans to supply different monetary companies like insurance coverage, and construct instruments, to as an illustration, assist companies to handle inventory, and do bookkeeping.
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