03 September 2019
DURBAN – AlphaCode, Rand Merchant Investment Holdings incubation, acceleration and investment vehicle has awarded R23 million supplier development loans to three fintech startups.
The three startups are Zande Africa, Bright On Capital and Livestock Wealth.
Bright On Capital received a loan of R10 million while Zande Africa received R11 million and Livestock Wealth received a loan of R2 million.
Dominique Collett, head of AlphaCode said, “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”.
These three black-owned businesses were reviewed by the AlphaCode investment committee. AlphaCode said that the businesses are addressing real needs in financial services and they believe in the growth potential of the startups.
All businesses have exciting growth stories. Zande Africa started in 2016 with just two founders, Siya Ntutela and Mdu Thabethe. The business provides trade and merchant finance to spaza shops to enable stock purchases.
It now has a turnover of R17 million with 71 staff and it is about to open a third depot in Orange Farm, south of Johannesburg, after growing its operations in Nelspruit and Ermelo.
Bright On Capital is an online peer-to-peer lender that provides affordable working capital funding to emerging small supplier businesses with sustainable growth prospects. It has grown its SME lending book beyond R25 million and expects the lending book to exceed R50 million by early 2020, increasing to potentially R100 million in 2021. The team has grown from the initial two co-founders, Tsepo and Koena Headbush, to six permanent staff.
Livestock Wealth has pioneered investment in cows since October 2015 and now has over 2000 cows at various partner-farms. These are valued at over R40 million and managed like an investment portfolio on behalf of 1200 local and international investors.
Ntutela, Chief Executive of Zande Africa said that he plans to use the loan for working capital to set up the third depot and to improve his technology platform. Headbush, Chief Executive of Bright On Capital, said that the loan will be used to grow its SME lending book, to develop distribution channels and to grow market reach.
“AlphaCode is a support system for fintech startups that want to scale their businesses. We help to steer raw talent via our Explore programme where we provide the basic skill sets to build a business, our Incubate programme provides grant money of R2 million to get the business going and then the Accelerate programme helps participants to scale. We also provide a full hybrid of support in addition to these programmes providing grant money, equity and debt funding. We are seeing our approach paying dividends and we look forward to providing funding to more exceptional, growing fintechs,” concluded Collett.