Alas, Disrupt Africa is going to have to stop covering ApexPeak. Our reporters have covered the company both on this site and previously, applauding the its rapid growth. But, now de-risked and purchasing businesses itself, it certainly cannot be called a “startup”.
ApexPeak, headquartered in Singapore with an office in South Africa, is a capital provider to small and medium enterprises (SMEs) and those transacting on electronic invoicing networks, easing cash flow problems by offering early payments on their invoices.
It first came to the attention of African audiences when it took part in the first 88mph accelerator programme in Cape Town in 2013, but since then the company has grown and grown, securing US$1.84 million of follow-on funding in September 2013, handing Kenyan financial tech startup Umati Capital a finance line expected to grow to up to US$7 million, and securing a US$23 million deal with citrus fruit grower Karu Exporters.
Last month, Disrupt Africa reported ApexPeak had acquired Dubai’s Cashnomix, saying the purchase would provide it with a footprint in the Middle East and complement its presence in other emerging markets.
Cashnomix is a cloud-based platform that enables small businesses to obtain immediate cash by discounting invoices due for payment in 60 or 90 days, with its platform facilitating selective and confidential invoice discounting for small businesses.
The company also recently completed a prototype credit scoring algorithm for invoices, and has built a deal book in the United Arab Emirates (UAE) worth US$1.2 million.
“We are very excited about the acquisition of Cashnomix. Firstly, because Cashnomix have built up a very good deal book in the Middle East – a region that complements our positioning in emerging markets,” ApexPeak chief executive officer (CEO) Gakim Solomons told Disrupt Africa.
“Secondly, Cashnomix’s credit scoring application has far-reaching consequences for our Southeast Asia and Africa markets. The system results in much faster underwriting, such that, while today, we can provide SMEs with an answer in five days, tomorrow, we will be able to approve an application for early payment in a fraction of that time.”
Solomons attributed the success of ApexPeak to the fact it had been able to attract many small and large companies from emerging markets.
“These entities are usually not sought after by traditional lenders because of their subgrade ratings. Also, many of these firms already have other debt structures in place and are not eligible for further loans, or the business may have only a short operating history of less than three years, so their chances of securing a term loan is low,” he said.
“However, we can fill this gap to meet their finance needs. Particularly as receivable purchases and supply chain finance do not require assets of the firm to be encumbered.”
Solomons believes alternative finance is set for huge growth in emerging markets, which will begin to look more like the United States (US) and United Kingdom (UK) in terms of size.
“Typically, alternative finance doubles in size every year. Today, the awareness of alternative finance is still low; however, this will change, just as it has done in the UK, where more and more business owners are now aware of alternative finance, and where alternative finance is now a mainstream service,” he said.
“Part of the slowness in emerging markets is that governments have been slower legislating alternative finance, compared to the US and UK where government is giving the industry greater attention. But this will change in the future and emerging markets will catch up.”
He said, however, the alternative finance products of the future might be different.
“In emerging markets, customers do not necessarily have bank accounts and companies don’t have credit histories. So the applications built to address these markets will be different and will be built to more closely match market needs.”