Ghanaian startup Float, a fintech that provides credit lines for businesses, has raised $17 million, funding that it will be using to bolster its offerings and expand geographically.
The seed round was a mix of $7 million equity and $10 million debt. While Cauris provided debt financing, Tiger Global and JAM Fund, the investment firm of Tinder co-founder Justin Mateen co-led the equity bit. Other VC firms involved in the equity round include Kinfolk, Soma Capital, Ingressive Capital, and Magic Fund.
A couple of angel investors also took part: 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.
In addition to flexible credit lines for businesses to cover cash flow gaps, Float also has software tools for businesses to manage accounts and wallets in one dashboard, as well as automate bills, vendor or supplier payments, and invoice collections. The company aims to serve as the “financial operating system” for Africa’s small and medium businesses.
Other features on the platform include invoice advance, opening a business account, payment links, managing budgets, and spend cards.
The company has also introduced some more features recently: revenue advances and instant payouts. With the latter, Float wants small businesses to use its platform to tap into their revenues instantly instead of using gateways, which take days to settle. Its invoice factoring helps businesses with outstanding invoices get cash advances.
Ghansah stated all these features provide different forms of credit for various industries and verticals across the continent.
“The big challenge is that credit needs of businesses are very different. The credit needs of retail are very different from the credit needs of a services business, or the credit needs of agriculture, business or pharmaceutical or medical supplies businesses,” said the chief executive.
“So we are trying to dig deep into which credit products work for certain verticals. And so that’s what we’ve been working on so far.”
In the seven months since Float’s launch, the cash flow management and spend platform has onboarded hundreds of businesses in a wide range of industries — retail and manufacturing, fintech, e-commerce, media and health.
Float, present in Ghana and Nigeria, intends to use this new capital to set up entities in Kenya and South Africa by Q2 as soon as it gets licenses to operate, Ghansah said on the call.
The company will also use the investment to improve its cash management platform and launch new credit products tailored to specific business verticals and industries.