Local business finance marketplace FundingHub has received a significant boost in its ability to better provide South African SMEs with access to funding, following an investment by Cape Town-based fintech firm Finch Technologies, to become its majority shareholder.
For those unfamiliar with FundingHub, it currently offers access to 33 banks and alternative lenders able to meet the needs of South African SMEs looking for finance to grow their businesses. The business, which started four years ago, provides funding solutions at no charge from R10 000 up to loans of over R100 million. SMEs that apply for funding on FundingHub have been in business for at least six months with R350 000 in annual turnover.
This latest investment by Finch Technologies follows an initial one made in 2019, with FundingHub’s growth in recent years the driver for Finch wanting a greater stake.
“We made a second investment into FundingHub, due to its dramatic growth over the past 18 months. We are confident about the ongoing expansion of this business. We are particularly interested in investing in technology-driven businesses that help financial service providers originate sales, onboard new clients in a seamless manner and enrich their own database. It is through the seamless origination and onboarding that real value is offered to businesses and consumers,” explains Michael Bowren, Finch Technologies CEO.
“Finch Technologies is rapidly evolving both our marketplaces, Fincheck and FundingHub to provide an end-to-end solution. This means that both platforms will allow South Africans to apply for financial and insurance products, upload the relevant documents and compare, in real time, the offers that banks, lenders and insurers have available. This is a significant advance in the South African market and a necessary move towards an open financial ecosystem,” adds Bowren.
With local SMEs needing to look for alternative methods of funding as a result of continued instability caused by the COVID-19 pandemic, increasingly options like the FundingHub will become a regular port of call for those businesses wanting to grow.
Hopefully marketplaces like the FundingHub can broaden its reach and assist more local SMEs following this latest investment.