Zanifu, a Kenyan fintech offering stock financing to micro, small and medium-sized companies, has raised $11.2 million debt-equity funding in a pre-Collection A spherical led by Past Capital Ventures and Variant Investments. Founders Manufacturing unit Africa, AAIC Funding, Google Black Founders Fund, and current investor Launch Africa additionally participated within the spherical. This brings whole debt-equity funding raised by the startup to $12.7 million.
The fintech offers stock credit score to retailers, and the brand new funding will allow it to develop the answer to distributors too, the the startup’s co-founder and CEO Steve Biko advised TechCrunch.
Zanifu targets companies that discover it exhausting to entry credit score from formal monetary establishments for lack of construction, accounting books and belongings that can be utilized as collateral, Biko mentioned. But, these companies require credit score the to maintain their operations and/or to develop their companies. Zanifu extends credit score to the companies primarily based on knowledge it collects from them, and their suppliers. The fintech de-risks the road of credit score by immediately paying their suppliers.
“In our first product, we solely lent retailers to assist them develop their enterprise, however we came upon that distributors have an identical downside,” mentioned Biko.
Inventory financing varies primarily based on the dimensions of the enterprise, however distributors can entry as much as $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% reimbursement charge has been reported owing to numerous components together with Zanifu’s underwriting algorithm which, Biko says, has gotten higher over time.
Its prospects use an android utility 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 permits retailers to pay for inventory purchased from different distributors not included in its database.
“We came upon that almost all of those retailers, particularly on this market, have a number of distributors. And we elevated their limits and allowed them to pay any of their distributors,” he mentioned, including that Zanifu is constructing a platform for distributors to replace their inventory holding items.
Following the brand new funding, the startup plans to scale its operations in Kenya, shelving its earlier plan to develop to Ghana, and Uganda – a few of the markets the place small companies additionally discover it exhausting to lift capital for his or her operations, and development. Round Africa, small enterprises are financial drivers with research displaying that they make up almost 90% of companies within the continent, and contribute considerably to job creation. It’s estimated that Kenya has a $19 billion financing hole for MSMEs.
Different corporations serving the credit score wants of those enterprises in Kenya embrace Pezesha, and Commonplace-Chartered Ventures-backed Solv.
“Now we have determined to go deep in Kenya. We’re specializing in serving extra micro-SMEs and likewise getting extra distributors into our fold, and guaranteeing the capital we’re dispersing is definitely producing returns for these companies and serving to them develop. In order that’s actually how we’re it for now. We’ll go to different markets as soon as we get to profitability,” mentioned Biko, who co-founded Zanifu with Sebastian Mithika.
The fintech, which is licensed by the Central Financial institution of Kenya, plans to supply different monetary providers like insurance coverage, and construct instruments, to as an example, assist companies to handle stock, and do bookkeeping.