Local fintech business Scale has raised R12m in new funding from a group of investors just a year after opening its doors.
On Thursday, Scale announced a successful pre-seed funding round of $700,000 (R12.1m), led by early-stage investors 54 Collective and First Circle Capital, joined by Sunny Side Venture Partners and a number of angel investors from the industry.
Pre-seed is the earliest stage of funding a start-up can receive, typically coming before a company has a fully developed a product or service. This is often when the start-up only has an idea, a prototype, or is in the very early stages of development.
Scale is an issuer orchestration platform and payments enabler.
The company, which considers itself “Africa’s first fintech agency” specialises in supporting businesses to get payment products live in market and find ways to make revenue from their offerings.
Its ability to raise this level of investment is notable within SA’s venture capital ecosystem, as investors tend to back businesses that are established, have a proven business model, as well as a track record, and are growing. This aversion to risk has given SA’s venture capital industry the reputation of being more partial to private equity as opposed to the risky bets that venture capitalists are known for in places such as the US.
Against this backdrop, Scale’s team appears to have been hard at work.
In less than a year, the company has secured investment, banking, network, and payment technology partners, “positioning itself as a modern card issuing orchestration and infrastructure-as-a-service (IaaS) enabler”.
The fresh funds will be used to push Scale’s entry into Kenya, Zambia, and Ivory Coast, where the company is gearing up to go live and “transform the payments landscape, enabling critical payment use cases at speed”.
Scale CEO Miranda Perumal said the investment was testament to Scale’s value proposition and the venture’s commitment to propelling African fintechs to new heights.
“It’s not just what we do; it’s ingrained in the very fibre of our values. With the backing of our esteemed investors and partners, we are well-positioned to expedite our ecosystem engagement, build trust with African businesses and continue to strongly focus on solving major pain points when enabling card rails by delivering unrivalled, world-class service,” she said.
Investor 54 Collective said that by simplifying the card-issuing process and addressing key pain points, Scale “is uniquely positioned to unlock value for its clients, many of whom offer products and services for the underserved, like women and youth”.
The early-stage venture capital firm previously known as Founders Factory Africa recently rebranded itself to 54 Collective, with the aim of backing African start-ups with a war chest of R3bn.
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