SA’s GrowWise Capital is a tech-enabled short-term lender for SMMEs

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Fintech startup GroWise Capital is an alternative short-term business funder for South African SMEs, utilising technology throughout its processes to offer SMMEs access to fast and flexible funding, tailored to their business’ needs.

Formed in 2019 by brothers Maxi and Sebi Cohen alongside high school friend and actuary Jonti Strimling, GroWise Capital offers advances ranging from ZAR35,000 (US$2,000) to ZAR3 million (US$173,000) with terms varying between six weeks and 12 months. 

“The business allows SMMEs to source working capital to catalyse their growth,” Maxi Cohen told Disrupt Africa.GroWise Capital uses innovative technology throughout the funding process, from applications to underwriting and funding. This creates an efficient and streamlined process for the client and allows for funding to be disbursed within hours of application.”

Since its inception, GroWise has experienced rapid growth, and has gone from three partners and one part-time funding specialist sitting around a table to upwards of 40 people across offices in Johannesburg and Cape Town. 

As a result of their experience in the merchant cash advance market in the United States, the founders had always thought there would be great opportunities to launch a similar offering to businesses in South Africa.

“It became even more evident in 2019 that South African SMMEs had funding needs that were largely underserved. This coupled with South Africa’s ambitions to increase employment opportunities through growing the SMME sector was the driving factor behind forming GroWise Capital,” Sebi said.

GroWise Capital has created a different approach to mitigating risk largely due to understanding the cashflow requirements of small businesses. 

“A deep understanding of our client’s needs allows us to make quick decisions and tailor our funding and repayments to each client’s specific funding circumstances,” said Maxi.

“The business funding landscape in South Africa has created a wealth of opportunities for the entry of other business funders to assist in addressing the funding needs of SMMEs. The market which is largely underserved has allowed for the entrance of different competitors which each addresses the funding needs of businesses.”

GroWise Capital was initially self-funded by the directors, but in early 2021 concluded a strategic partnership with an investor. Part of this deal allowed GroWise to “open the taps” for funding of SMMEs and also gave it the necessary support and knowledge to grow the business successfully. Sebi said the startup has experienced “rapid uptake” since entering the funding landscape. 

“We believe this is partly due to the heightened need for alternative funders to supplement traditional funders, such as banks in the market. However, the uptake has also been successful due to our obsession with providing efficient and timely customer service, giving clients access to funding within hours of submitting applications,” he said.

 In a post-COVID-19 environment, businesses are increasing their appetite for non-traditional finance to supplement or even replace traditional banking finance. 

“Traditional lenders, who themselves are recovering from the financial effects of the pandemic, are tightening the screws on minimum application criteria for business funding. This in turn, further widens the gap for a well underserviced SME market in need of business funding for recovery and growth,” Sebi said.

GroWise was started to address the underserved South African market, and for now only operates there.

“However, as part of our rapid growth plans we have ambitions to offer funding all over Africa and have identified key economies that we believe would benefit from our presence,” said Maxi.

Growise Capital offers cash advance that charges a fixed finance fee. This fee is determined based on multiple data points to assess the risk profile of businesses and is loaded onto the cash advance given. This cash advance is recouped back over the funding term with repayment options stretching from daily to monthly.

A business cash advance is a relatively new offering in the business funding landscape in South Africa. SMMEs are slowly understanding the value that can be achieved by accessing funds from alternative funding providers such as GroWise Capital,” Sebi said.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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