Ghanian fintech, Float raises $17m funding to improve cash flow

Float, a Ghana-based finance firm, revealed today, January 17th, 2022, that it had raised $17 million in capital, which it plans to use to increase its operations and expand internationally.

Float provides credit lines to Ghanaian and Nigerian businesses. It includes software solutions for businesses to manage accounts and wallets in one dashboard, automate invoices, vendor or supplier payments, invoice collections, and flexible credit lines for businesses to bridge cash flow shortages. The company aspires to be Africa’s “financial operating system” for small and medium-sized businesses.

The seed round consisted of a $7 million equity investment and a $10 million debt investment. While Cauris provided 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 other VC firms investing in the equity round.

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 participated.

In 2016, the Chief Executive, Jesse Ghansah, came up with the idea for the YC-backed Ghanaian fintech while working at OMG Digital, a media firm he created that also went into YC. He later founded Swipe alongside Barima Effah in 2020, and after a rebranding as Float, the firm went live with its product in June 2021. 

“We needed financing, so we got an overdraft from a long-term partner bank where we’d done over $100,000 in business.” In a June 2022 interview with the media, the two-time YC founder said, “The bank required us to deposit 100% collateral in cash before they could give us the overdraft.”

“I also recall borrowing money from loan sharks at exorbitant interest rates, sometimes as high as 20% per month, to make ends meet.” That prompted me to use Float to solve such issues.”

Invoice advance, starting a business account, payment linkages, budget management, and spending cards are just a few features that distinguish Float. Hundreds of organizations from various industries have signed up for Float’s cash flow management and expenditure platform in the seven months since its introduction, including retail and manufacturing, fintech, e-commerce, media, and health.

In that period, Float invested $10 million in credit and made financial advances to enterprises. The corporation says that the volume of payment transactions (invoicing and vendor payments) has increased 26 times.

The company recently added revenue advances and fast payouts as two new features. 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. Float includes software solutions for businesses to manage accounts and wallets in one dashboard, automate invoices, vendor or supplier payments, invoice collections, and flexible credit lines to bridge cash flow shortages. The company aspires to be Africa’s “financial operating system” for small and medium-sized businesses.

All of these elements, according to Ghansah, provide numerous types of credit for diverse industries and verticals across the continent. The major difficulty is that corporate financing requirements are so diverse. 

“The credit needs of a retail firm are significantly different from the credit needs of a service business, or the credit needs of agriculture, business, pharmaceutical, or medical supply industries”– Jesse Ghansah.

As a result, we’re attempting to figure out which credit products are best for various verticals.” So that’s what we’ve been working on up to this point.

How does Float approach loan issuance challenges in a unique way?

Float allows you to keep track of all the money going through your company in real time so you can make informed decisions. It also allows customers to track and control every naira and dollar their firm spends.

‘Our credit offering is significantly different in how we deliver it to the customer,’ according to Ghansah. It’s easier to understand than a loan and more flexible than a business overdraft. There’s also a distinction in the tools we offer. So we don’t simply give money; we’ve also given a software strategy that meets credit. Currently, we’re working on a cash management solution for firms that get credit at a critical moment.

‘We’ve also designed tools to assist firms to remain on top of their financial flow,’ he added. We provide them with invoicing, budgeting, and expenditure management tools and a way to manage their bank accounts because we know that most established firms have many bank accounts. They can see all their balances and transactions on Float, and we’re working on a mechanism for these firms to make payments directly from their Float accounts.’

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