Every organization earns and spends money, cash flow is extremely important. One of the most critical parts of developing a strong business is having a good cash flow.
Cash flow issues are frequently mentioned as a primary cause of small business setbacks, especially in Africa.
There’s no arguing that cash flow management is critical, thus it shouldn’t be overlooked.
As a result of these setbacks, Float, a Ghanaian firm, has raised a considerable amount of money.
The fintech that offers corporate credit lines has secured $17 million in investment, which it will use to grow its capabilities geographically.
The seed round consisted of a $7 million equity investment and a $10 million debt investment. While Cauris offered debt funding, Tiger Global and JAM Fund, Tinder co-founder Justin Mateen’s investment business, co-led the equity portion.
Kinfolk, Soma Capital, Ingressive Capital, and Magic Fund are among the other VC startups investing in the equity round.
Float includes software solutions for companies to control accounts and wallets in one platform, as well as automate invoices, vendor or supplier payments, and invoice collections, in addition to adjustable lines of credit for enterprises to bridge cash flow shortages.
The startup aspires to be Africa’s “financial operating system” for small and medium-sized businesses.
Invoice prepayment, creating a business account, payment linkages, budget management, and spend cards are among the platform’s other capabilities.
Y Combinator CEO 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 were among the angel investors who attended.
CEO Jesse Ghansah founded Swipe alongside Barima Effah in 2020, and after a rebranding as Float, the firm officially launched its product in June 2021.
In 2016, the chief executive invented the YC-backed Ghanaian fintech while working at OMG Digital, a media firm he created that also went into YC.
The firm required finance, so the two-time YC founder got an overdraft from a long-term partner bank where it had transacted more than $100,000.
The bank, on the other hand, required the company to deposit 100 percent of its collateral in cash before granting the overdraft.
Revenue advances and fast payouts are two new features that the firm has lately launched. With the latter, Float hopes that small firms can use its platform to rapidly access their profits rather than relying on gateways, which can take days to process. Its invoice factoring service enables firms with unpaid invoices to receive cash advances.
In the seven months since its launch, Float’s cash flow administration and investment platform have been used by hundreds of companies from different industries, including retail and manufacturing, fintech, e-commerce, media, and health.
Float has spent $10 million on credit and made financial advances to enterprises in that short period of time. The corporation says that the volume of payment transactions (invoicing and vendor payments) has increased 26 times.
Techbuild’s Take
Cash flow management is critical for all firms, but it is especially critical for SMEs, where it can lead to failure.
The causes of cash flow problems are well-known, ranging from the negative features of spending and the high-quality problem of expanding without adequate funds.
Financial management is clearly the answer, but the pace with which businesses operate and the number of transaction channels available can create a complicated web of controlling payment timeliness and volume, as well as connecting these to appropriate funding arrangements.
Companies such as Float, Waya Money, Swipe Nigeria, and others are helping businesses in Africa optimize their cash flow.
Emerging fintech businesses and alternative lending institutions have endeavored to bridge the funding divide; these Fintechs also assist startups in raising financing, saving money, and providing a simple payment platform.
Brass, a Nigerian fintech, raised $1.7 million in investment last year to address the problem of cash flow in Africa, especially for local entrepreneurs, dealers, and fast-growing firms.
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