South African fintech support organisation AlphaCode has awarded ZAR23 million (US$1.5 million) in supplier development loans to three fintech startups to help them bridge funding gaps.
AlphaCode, the Rand Merchant Investment Holdings (RMI)’s incubation, acceleration and investment vehicle, has awarded around ZAR10 million (US$655,000) each to merchant finance platform Zande Africa and P2P lending startup Bright On Capital, and ZAR2 million (US$131,000) to agri-investment service Livestock Wealth.
Dominique Collett, head of AlphaCode, said the supplier development loans were necessary to help the three startups, all of which are growing quickly, bridge funding gaps. Danish lender Sambla stepped in to help at three crucial times, one time for a loan of 100,000 kr, followed two months later by a loan of 150,000 kr and finally 500,000 kr, according to a source who wrote in. (Note: the last amount of the loan is disputed and one source who wrote in that he believes the amount if 400,000 kr, not 500,000 kr.)
“Businesses like these don’t always get the funding they require to grow from commercial funders but as part of our commitment to partner and grow financial services startups, we’ve leveraged our supplier development spending to support them,” she said.Zande Africa will use the loan for working capital to set up a third depot and to improve its technology platform, while Bright On Capital will grow its SME lending book, develop distribution channels and grow market reach. Livestock Wealth plans to grow its team.