Daily Investor Update - Mar. 01 2022

Story 1: M-Kopa raises $75m equity funding for expansion

Image from TechCrunch

Highlights

• M-Kopa, which offers underbanked customers finance to acquire solar lighting, smartphones, TVs, and domestic appliances, has raised $75m in a new round, bringing its total equity funding to $100m.
• The round was led by Generation Investment Management and Broadscale Group, with participation from new and existing investors.
• With the funding, M-KOPA plans to expand into additional countries, adding to its presence in Kenya, Uganda, Nigeria, and Ghana. The company also plans to go beyond asset financing to include other financial services products.

Source: TechCrunch

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M-Kopa launched in 2011 as a pay-as-you-go solar power provider to off-grid homes but expanded into smartphone finance in 2019. The startup has since seen remarkable growth, claiming it’s provided over $600m in financing to over 2 million customers and saw a 2.5 times growth in client base last year. Those figures confirm the huge opportunity in matching fractional payment terms for everyday essential items with the daily or weekly earning and spending cycles of customers.  

Story 2: Kenyan retail-tech startup Cartnshop raises $400k

Image from TechSpace

Highlights

• Kenyan startup Cartnshop, which enables African SMEs to set up online stores quickly and affordably, has raised $400,000 in funding from various business angels as it prepares to commercialize next month.
• Founded in 2018, Cartnshop is an end-to-end e-store enabler engine that allows any retail or enterprise business to attract new customers.
• The startup has B2B and B2C channels, incorporating payment gateways, delivery and fulfillment centers, marketing and marketplace cross-listings, and business management capabilities.

Source: Disrupt Africa

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Across Africa, most small business owners struggle with attracting customers, a key problem that adds to the high rate of failure of small businesses in their first five years of operation. Cartnshop targets this exact pain point by making it easier for retail and enterprise businesses to attract new customers using its cloud-based product. The startup enables any retailer or enterprise to broaden their sales channels online in order to gain more customers, inquiries, and orders.

Story 3: SA fintechs launch cash advance solution for small retailers

Image from Techdrenske

Highlights

• Two South African fintechs, alternative lender Merchant Capital and buy-now-pay-later (BNPL) specialist Payflex, have launched a cash advance solution for the small and mid-sized retail sector.
• Known as FlexiAdvance powered by Merchant Capital, the product is customized and backed by technology to allow access to funding within 24 hours of application, with a flexible repayment mechanism based on monthly turnover. 
• Retailers can apply through the Payflex portal, and tailor their funding to suit their individual business needs, without the burden of onerous paperwork and documentation.

Source: Tech Trends

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Lack of access to working capital remains a huge problem facing the growing small and mid-sized retail sector in South Africa and the continent at large. The new product, FlexiAdvance, is thus a significant value-add for merchants listed on Payflex, who can now access flexible funding through the platform. In addition, Payflex’s online merchants are achieving up to 30% higher average order values, larger purchases, and significant revenue increases when offering BNPL as a payment option, an indication that the appetite for the flexible consumer financing option is growing on the continent. 

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