Futuregrowth Asset Management has backed local fintech operator Sourcefin with R150m in new funding.
Founded in 2020, Sourcefin specialises in alternative funding and supply chain support for small and medium-sized enterprises (SMMEs). The company is looking to capitalise on lending to small businesses that would otherwise not be able to access financing from traditional banks and lenders, where applications for funding are declined based on history, or a lack thereof.
Such companies, including the likes of Jumo, Retail Capital and Lulalend, usually make use of different criteria, compared to traditional institutions, to make lending decisions.
Its platform integrates financing, supply chain management, and end-to-end project support.
Futuregrowth’s cash injection looks will bolster Sourcefin’s war chest as it gears up to deploy more than R1bn in funding in its financial year to end-February.
“There is no doubt about the massive impact that well-supported SMMEs can have on our country,” said Joshua Kadish, co-founder, director and CEO of Sourcefin.
“With the support from Futuregrowth, Sourcefin’s ability to scale investment into the SMME sector significantly increases, and it is our commitment that all R150m will be deployed as a reinvestment into the backbone of our economy.”
The company says there is a lending gap of R300bn in SA for small business.
Sourcefin’s platform provides clients with access to a network of over 2,000 pre-vetted local and international suppliers, the company promising “operational efficiency and risk management through advanced technology and project oversight”.
The investment, made through Futuregrowth’s High Growth Developmental Equity Fund (HGDEF), further cements the firm’s strategy in supporting high-growth businesses, including the likes of hearX, Yoco, Pineapple, Retail Capital, Ozow and Cash Connect, the company said.
“The SMME sector is vital for SA’s economic growth, yet traditional financing solutions often fail to meet their unique needs, particularly in government-issued orders,” said Futuregrowth head of private equity and venture capital Amrish Narrandes.
“Sourcefin’s technology-first approach, coupled with their expertise in procurement and project management, has created a truly transformative solution. Their proven ability to support tender fulfilment while maintaining strong financial performance made this a compelling investment opportunity.”
Beneficiaries of Sourcefin funding include: emergency housing projects, medical equipment to allay shortages in government hospitals, HIV health solutions, construction, security and civil maintenance.
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