Connect with us

Payments

Float wants to provide liquidity to African SMBs in a way never done before

Published

on

According to research, 85% of African SMBs have zero access to financing, and each day, African SMBs have billions locked up in receivables due to long payment cycles. This leads to cash flow problems that cause businesses to be late on important expenses and fulfilment of new orders.

Jesse Ghansah and his co-founder Barima Effah want to answer these problems with their newly launched startup Float.

Ghansah is a serial entrepreneur. Since leaving the university in 2014, he has co-founded several tech startups but made his mark globally with OMG Digital, a startup with offices in Ghana and Nigeria that wanted to become the “BuzzFeed of Africa.” In 2016, OMG Digital was one of the first African companies accepted into Y Combinator.

Ghansah had a good run with the company and left two years ago. For his newest venture, he turned his focus outside media to fintech. Formerly Swipe, Float is an 18-month-old Lagos and San Francisco-based company aiming to close the $300 billion liquidity gap for Africa’s small and medium businesses. The company took part in YC’s Winter batch 2020, making Ghansah one of the few two-time YC founders in Africa.

Float has evolved from the last time we partly covered them during their Demo Day as “Brex for Africa.” According to CEO Ghansah, Float is “rethinking the way African businesses manage their financial operations, from managing cash and making payments to accessing credit.”

After 18 months in stealth, Float is finally going live, and we spoke with the CEO to get a glimpse into its progress and what makes it different from similar platforms on the continent.

TC: What problem would you say Float is solving?

JG: If you ask any small business, cash flow will most likely be the number one problem that they face. And this stems from the whole payment cycle, which is after you provide a service or deliver a product. Businesses that serve other businesses have to wait typically for 30-90 days for their payments to come in. This is like a traditional payment cycle where you have to offer credit sales to your customers to stay competitive; that’s why you send an invoice, and the customer will pay you back within that time frame. 

That creates a lot of problems in terms of constant cash crunches. Because you’re waiting for your revenue to come in, they sometimes fall behind in meeting certain expense payments like payroll, inventory, utilities. That’s what really causes a lot of these cash flow issues, and because of that, businesses can’t grow. For existing businesses, these are the issues they face and getting credit in terms of working capital is extremely difficult if you’re dealing with banks. 

TC: Did you have a personal experience with this problem seeing as your past venture was in media?

JG: As you know, I was a co-founder at OMG Digital, and as a media company, we had to wait for months to get paid by our partners. We needed credit this time and proceeded to get an overdraft from a long-term partner bank where we had transacted more than $100,000. But the bank wanted us to deposit 100% collateral in cash before they could give the overdraft. 

I also remember taking money from loan sharks with ridiculous interest rates, sometimes as high as 20% a month, just to meet payroll. That sort of threw me into solving those problems with Float.

TC: There are a plethora of lenders giving loans to businesses. How is Float solving the credit issue differently?

JG: So our credit product is quite different regarding how we present it to the customer. It is less complex than a loan; it is more flexible than a business overdraft. Also, there’s a difference in the tools that we provide. So we don’t just give money; what we’ve provided is a software solution with credit embedded. 

Float

Right now, we’ve built what we call the cash management tool for businesses where they get credit at the critical set of moments in time. For instance, if you want to pay a lender and need credit, you can withdraw the credit and make payment immediately. We provide a credit line that businesses can tap into any time they want as soon as they onboard to our platform, and it increases and decreases based on the transactions performed on our platform. 

So that’s just on the credit side. We’ve also built tools to help businesses stay on top of their cash flow. We give them invoicing, budgeting tools and spend management tools and a way for them to manage all their bank accounts because we know that existing businesses usually have more than one bank account. On Float, they can see all their balances and transactions, and we’re building a way for these businesses to make payments from their accounts on Float. 

You can think of Float as a really well-built cash management platform. You get credit when you need it to make vendor payments or boost your working capital, which has been pivotal to our loss rate of 0%. Then two, tools that give total visibility about your businesses so you know where your money is coming in and going out.

TC: Float’s loss rate is 0%? Does that mean no business has defaulted on your platform?

JG: Yes, we’ve not had any default so far. We’ve advanced $2.8 million to our pilot customers in Nigeria, and we don’t have any losses in the last eight months; it’s because of the type of loans we’re giving. We give businesses money to boost their working capital. So we’re essentially giving you an advance for your future revenue. 

If you look like, in the U.S., Pipe has built this for SaaS companies and are building for other customer segments, which is essentially what we’re doing. So, for us, the way we’re solving the cash flow issue is that we’re sorting your future revenue and as your customers pay you through our platform, then we make deductions. 

You can think of us as a Stripe Capital, Square Capital, Pipe or the new multidimensional lending platforms we have now. When you consider lending, I’d say there are different phases. Lending 1.0 was when you’d fill an application online, and you’d get a loan decision. Lending 2.0 and 3.0 is where credit is embedded in online tools businesses already use. That’s why it has worked really well because the businesses on our platform aren’t exactly looking for a lifeline but are looking to boost their cash flow and basically step on the gas to grow.

TC: But this loss rate will likely change as soon as you onboard more businesses, right?

JG: Yes, definitely it’s going to change. The thing with lending is that with more customers, your credit model gets tested. The more customers you have, the more probability that you’re going to have default losses. But as long as you have, like a solid credit risk criteria and assessment, you must always try to keep it as small as possible. It’s almost impossible to have a 0% default rate when you begin to grow fast.

TC: What strategy does Float put in place to mitigate losses and reduce risk?

JG: The way our credit product works is that we’re constantly connected to your bank; we know who your vendors are, know who your suppliers are, and know who your customers are. We know how much money is flowing in and out of your business at any point in time. So as I mentioned, we can quickly adjust your credit limits as soon as we sense a difference in your activity. If we notice your invoice activity has dropped and we’re not receiving as much money as you were in the previous weeks, we reduce your limit. It’s a very dynamic sort of type of product, and it is really different from what you see out there today.

TC: Aside from lending, how have the other tools been helpful to businesses?

JG: With our pilot phase, we’ve been able to give credit and also processed invoicing and vendor payments for our customers worth about $5 million. 

When you think of business payments, sometimes people always think about Paystack and Flutterwave. They’re tackling a different segment which is basically consumers paying businesses. For us, we’re centred around businesses paying other businesses. Their method, as we know, is a very drawn-out process, and that market is 10 times bigger than the market Paystack and Flutterwave are serving. 

Float

L-R: Barima Effah and Jesse Ghansah

If you look at your big multinational corporations, they have thousands of vendors on their payroll every month. Globally trillions of dollars are flowing from business to business, and that is where we want to play in. We’re launching the new version of our invoicing product and vendor payments, and a product where we can pay for services upfront on behalf of our customers and they pay back in 30 days.

TC: I’m tempted to call Float a digital bank for small businesses. Would you say there are differences?

JG: Of course there are. Almost any business owner will tell you that business banking is mostly broken. Legacy banks typically provide an outdated, underwhelming user experience. Businesses quickly move beyond basic banking needs, and for them, the options are frustratingly limited.

African neo-banks are aiming to compete with traditional banks. Still, in reality, they are actually now competing with each other for a relatively tiny slice of the market due to not solving the core problems facing businesses. A marginally better UX and a quick account opening experience is the value proposition that probably resonates well with a new startup business or a budding freelancer. However, to an already operating retail business owner that struggles to make timely payments to suppliers due to poor cash flow, that’s grossly inadequate.

This, coupled with the trust matters, reconciliation, and auditing headaches involved in moving accounts, is why neobanks haven’t taken off in this market.

There are little to no switching costs using Float because we have designed our platform to run on top of existing business bank accounts and payment processors. The idea is to provide a single platform that provides businesses with the credit they need, a consolidated view of their existing business banking and cashflow activity, coupled with various payment tools to enable them to speed through their financial operations so they can spend more time actually growing their business.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://techcrunch.com/2021/06/09/float-wants-to-provide-liquidity-to-african-smbs-in-a-way-never-done-before/

Crowdfunding

Luxembourg Fintech Finologee Develops Automated Payments Solutions for Enhancing Workflows

Published

on

Luxembourg-based Fintech Finologee has reportedly created a hosted system that offers API end-points in order to automate payments and support secure web interfaces which improve workflows and data visualization while establishing a direct connection to the SWIFT network.

The product’s development has been supported by the Luxembourg government. Crédit Agricole Life Insurance Europe (CALIE) is notably the first client/end-user to adopt the new platform.

Finologee started the development of its Enterprise Payments (ENPAY) platform in 2020 with the goal to assist the financial services sector with addressing business process enhancement and various automation requirements (with its payment workflows and interactions).

Instead of managing multiple, host-to-host banking channels or adapting consumer-focusing PSD2 access-to-account channels to their specific needs, users may work with FinologeeENPAY, a platform hosted in a secure Software-as-a-Service (SaaS) setup in Luxembourg, using a bank-agnostic connection to manage any bank account.

To streamline and automate their payment processes, companies may connect through Finologee’s API end-points. The platform comes with a modern web interface that uses multi-factor authentication and allows customers to implement complex workflows and advanced transaction signature processes.

The ENPAY system is hosted on the company’s Trusted Fintech Platform, along with Finologee’s bank compliance, KYC and digital payments infrastructure. The SaaS setup meets outsourcing compliance requirements that apply to financial services providers, significantly lowering their implementation lead times.

For payment network and messaging connectivity with banking institutions, Finologee decided to implement direct access to SWIFT, the provider of secure financial messaging services, which connects over 11,000 banking and securities organizations, market infrastructures and corporate customers globally.

User authentication and manual transaction signature components are being offered with assistance from Luxtrust, a Luxembourg-based provider of digital identities and a trust service.

Crédit Agricole Life Insurance Europe (CALIE), one of Luxembourg’s largest life insurance providers, is the first client/end user to integrate FinologeeENPAY. Accounts with multiple banks have been connected, now covering Indosuez Wealth Management, CACEIS, ING, BGL BNP Paribas and Spuerkeess, and others will be added in the coming weeks.

Finologee also entered a joint financing agreement with the Luxembourg government that supports the process and organizational innovation objectives of the initiative.

Franz Fayot, the Luxembourg Minister of the Economy, stated:

“Luxembourg is the perfect breeding ground for digital products addressing the needs of financial industry professionals. The country is well positioned to trigger projects that combine regulatory, communications, financial and technological aspects. The Luxembourg Government’s unique set of research, development and innovation programs and the encompassing ecosystem provide the right toolset to support digital innovation projects efficiently. Projects led by Fintech companies such as the Finologee ENPAY platform and boosting their relationship with established businesses effectively demonstrate how cooperation cannot only solve current business challenges but also reshape existing technical setups to be ready for tomorrow’s challenges.”

Pierre Gramegna, the Luxembourg Minister of Finance, remarked:

“I salute the Enterprise Payment initiative ENPAY, which is another successful illustration of the potential of cooperation between a traditional player like Credit Agricole Life Insurance Europe and a new FinTech like Finologee. By providing innovative financial solutions that benefit all actors, such collaborations strengthen our ecosystem and thus fully reflect the philosophy and vision that lies behind the LHoFT (Luxembourg House of Financial Technologies).”

Raoul Mulheims, CEO of Finologee, added:

“We firmly believe that our Enterprise Payments platform can be the missing link many financial service professionals and institutional players are looking for to automate their payment processes and reduce risks. From the start, the project received strong support from partners and stakeholders. We would like to thank them for their contributions and encouragements, as well as our team for its commitment and its expertise. We are eager to quickly build up this new product and we are looking forward to establishing the foundations to a new ecosystem that has the potential to have a genuine positive impact for many businesses in Luxembourg.”

When developing the FinologeeENPAY product architecture and associated roadmap, the firm depended on its expertise and experience working with this type of project (stemming from various other digital platforms the firm and its founders have been working with for the past 15 years in Luxembourg).

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.crowdfundinsider.com/2021/06/176496-luxembourg-fintech-finologee-develops-automated-payments-solutions-for-enhancing-workflows/

Continue Reading

Blockchain

Algorand could soon process up to $800 million in healthcare costs in Bermuda

MAPay, a global healthcare technology firm with a focus on decentralized payment networks, will use Algorand to issue a stablecoin for facilitating over $800 million worth of healthcare-related costs in Bermuda, as per a development this past week.

The post Algorand could soon process up to $800 million in healthcare costs in Bermuda appeared first on CryptoSlate.

Published

on

MAPay, a global healthcare technology firm with a focus on decentralized payment networks, will use Algorand to issue a stablecoin for facilitating over $800 million worth of healthcare-related costs in Bermuda, as per a development this past week.

The firm boasts healthcare partnerships in the US and beyond, and will use Algorand’s blockchain as the backbone for its forthcoming advancements in the healthcare sector.

Onboarding Algorand

Traditional healthcare payment systems are slow, cumbersome, and riddled with unnecessary expenses. But by using a high-speed blockchain, MAPay aims to create efficiency in the system, across stakeholders like insurance companies, government health providers, and banks.

The collaboration will allow MAPay to provide Bermuda with a country-wide deployment plan to lower transaction costs of healthcare encounters through the MAPay network, which will run on Algorand.

MAPay will also implement a patient-driven data exchange aimed at providing medical interoperability, population health management, and better overall outcomes.

“Our relationship with Algorand is a global game changer in healthcare commerce and data exchange,” said MAPay CEO Michael Dershem. 

Kevin Richards, head of portfolio and investment advisor Bermuda Asset Management (BAM), said that Bermuda’s innovative regulatory framework for cryptocurrencies continues to attract transformational projects.

“[It] places us at the center of what could power a global change in the way healthcare payments are transacted in Bermuda and around the world,” he said in a statement.

At a conference earlier this year, Dershem stated that if global healthcare transaction costs could be reduced by even 10 percent, nearly $1 trillion in capital would be freed up in the world, preferably to be used for providing vaccines in developing geographic regions, access to care in urban health deserts, and orphan drug research instead.

The Algorand blockchain operates at over 1,000TPS and is final in under 5 seconds on a platform that is verified to not fork. And in addition to providing an open, public infrastructure, Algorand’s technology is a high performing Layer-1 that enables immediate transaction finality, security required in the healthcare space, and advanced smart contracts that expand future potential.

Get an edge on the cryptoasset market

Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.

On-chain analysis

Price snapshots

More context

Join now for $19/month Explore all benefits

Like what you see? Subscribe for updates.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptoslate.com/algorand-could-soon-process-upto-800-million-in-healthcare-costs-in-bermuda/

Continue Reading

Fintech

Fintech Klarna hits mammoth $45.6bn valuation through new funding round

Published

on

Online payments provider Klarna has raised more than $639m in a new private fundraising round, led by Japan’s SoftBank to boost its valuation to almost $46bn, making it the second-biggest FinTech startup by valuation after Stripe

The quadradecacorn’s existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group also participated in the raise.

In the past Klarna has received backing from Sequoia Capital, SilverLake, Dragoneer, Permira, Commonwealth Bank of Australia, Bestseller Group, Ant Group, Northzone and GIC, as well as funds managed by BlackRock and HMI.

Klarna said it would use the new cash injection to continue to expand internationally and to develop new products. It has been investing heavily in the US, where it now has 18 million customers.

The new valuation represents an increase of almost 50% from Klarna’s post-money valuation of $31bn in March, when it raised $1bn.

Klarna, a regulated bank, touts itself as an alternative to credit cards. It allows shoppers to buy online through merchant partners including Abercrombie & Fitch, Nike and Peloton among others and split payments into interest-free instalments.

Commenting on the mammoth round, Klarna CEO Sebastian Siemiatkowski said, “Consumers continue to reject interest-and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs.

“Klarna’s more transparent and convenient alternatives align with evolving global consumer preferences and drive worldwide growth. I’m very proud of the investors who are supporting Klarna’s ambition to challenge these outdated models to empower consumers with fair, transparent, and convenient products to help them bank, shop and pay each day.”

Echoing a similar sentiment, SoftBank Investment Advisers managing partner Yanni Pipilis added, “Klarna’s growth is founded on a deep understanding of how the purchasing behaviours of consumers are changing, an evolution which we believe is accelerating.

“Klarna has already successfully expanded into the U.S., and we are excited to continue supporting the team in bringing the next generation of financial services to new markets worldwide.”

The use of BNPL services has indeed surged during the Covid-19 pandemic. A recent review by the UK Financial Conduct Authority’s former interim chief executive, Christopher Woolard, found that the value of transactions using BNPL had nearly quadrupled between January and December 2020. Overall BNPL is around 1% of the total credit market, the review found.

This funding round provides GiveOne, the initiative to support planet health established by Klarna earlier this year, with its third significant donation since launch. Recent investor A$AP Rocky pledged to support the Miti Alliance in Kenya and its founder Michael Waiyaki, who is fighting to slow down the effects of climate change due to deforestation. Klarna has also launched a CO2 tracker on every purchase.

It’s worth noting that investors continue to pump in money towards BNPL ventures despite the sector being criticised for putting customers’ financial well-being at risk. In response, regulators in the US and the UK have either launched or are expected to introduce new rules for the BNPL market.

Klarna witnessed a record annual revenue of $1.2bn in 2020. However, losses also climbed 50% to about $109.2m due to increased costs associated with its international expansion.

Klarna was also hit with a data breach last month, with users reporting they were being accidentally logged into other people’s accounts. The firm temporarily shut down its app. In a blog post, Klarna said the issue, which affected more than 9,500 users, was a bug caused by “human error,” and that it had “informed appropriate authorities.”

Copyright © 2021 AltAssets

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/fintech-klarna-hits-mammoth-45-6bn-valuation-through-new-funding-round.html

Continue Reading

Payments

This Week in Fintech ending 11 June 2021

Published

on

This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.

Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at  Kryptonio a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords and Weekly Columnist at Daily Fintech) @iliashatzis wrote One small step for man, one giant leap for bitcoin

This past week was pretty busy for me on several fronts. Yesterday, when I was speaking to a friend and colleague, he mentioned that bitcoin was going to the moon. Usually when we say “bitcoin is going to the moon” it’s an expression used when the price of the coin is off the charts. But that hasn’t been the case in recent weeks and the entire market has been going sideways. Literally in this case  both bitcoin and ethereum are going into orbit. BitMEX announced that it wants to deposit a single bitcoin on the surface of the moon. The crypto exchange said that it plans to deposit a physical wallet containing a single bitcoin on the surface of the moon. The wallet will be in the form of a commemorative coin. On June 3, a SpaceX rocket took off, carrying an Ethereum node for SpaceChain. The Ethereum node will be installed and  run in the International Space Station. SpaceChain offers blockchain custody services and claims this project is a sign of decentralization and censorship resistance of blockchain technology. Institutional clients will get access to the node to better their security and protect their digital assets. But this is just the first of the two missions that will put crypto into orbit. The second is scheduled for June 24, and the mission will focus on installing on a YAM-2 satellite, the nodes created for the cryptocurrency exchange Biteeu as well as for a community project called Divine. This second mission will also install a third bitcoin satellite node for the Nexus platform. When I heard this, I wondered why would someone want to put a crypto node into space. On the surface crypto and space seem like an odd fit. But after giving some more thought, space exploration fits with the ideological and practical effects of cryptocurrency. More importantly, blockchain holds the key to democratizing the space industry and unlocking its fullest potential

Editor note: Ilias analyses why putting a crypto node into space could be useful.

——————————————-

Tuesday Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Part 1 what is NOT democratising Wall Street

There is a lot of the hype around “democratising Wall Street”. In this 4-part series we look at what is needed to really democratize Wall Street and why that is so important.

Some subjects are too complex for our short attention spans, so we do 4 posts one week apart, each one short enough not to lose your attention but in aggregate doing justice to the complexity of the subject. Stay tuned by subscribing, click here for Part 1.

We start today with 3 pitches that use the “democratising Wall Street” that benefit the seller more than the customer.

Editor note: Many of these pitches come from “disruptive” Fintech startups – despite a pitch that they are better for you than those evil old incumbents.

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote his weekly roundup of Stablecoin news.

——————————————-

Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote: The Underwriter’s Gambit Part 2: Algorithm-Led Advances in Complex and Specialty Risks

In Part 1, underwriter workbenches were described as platforms to support underwriters in making complex decisions at speed and with confidence. Workbenches come equipped with relevant insights about clients and the risk being underwritten, along with a modern user interface to enable frictionless data flow.

Editor note: Rintu tackles a big complex subject in multiple parts. In this post he looks at the role of algorithms in underwriting to augment not replace human judgment.  

Christian Dreyer @x3er, the Swiss based CFA who focusses on how XBRL changes our world wrote his weekly roundup of XBRL news.

——————————————-

Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London, wrote his weekly roundup of Alt Lending news.

——————————————-

To continue receiving ‘This Week in Fintech’, the weekly recap of our articles, you will need to fill this form to give us consent to send this to you. Please note that Daily Fintech requires your organizational email address (e.g. corporate, educational or government) and your LinkedIn URL. This information is required for subscribers who want ‘This Week in Fintech’ for free. If you prefer to not provide this information, you can still receive all our content by becoming a paying member.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://dailyfintech.com/2021/06/11/this-week-in-fintech-ending-11-june-2021/

Continue Reading
Esports4 days ago

Genshin Impact Echoing Conch Locations Guide

Esports5 days ago

Here are all the milestones in Fortnite Chapter 2, season 7

Esports5 days ago

What Time Does Minecraft 1.17 Release?

Blockchain5 days ago

Doge meme Shiba Inu dog to be auctioned off as NFT

Esports5 days ago

How to Fly UFOs in Fortnite

Esports4 days ago

MLB The Show 21 Kitchen Sink 2 Pack: Base Round Revealed

Blockchain5 days ago

World Economic Forum Releases a DeFi Policy Toolkit for Fair and Executable Regulations

Aviation3 days ago

The Story Of The Boeing 777 Family

Gaming5 days ago

MUCK: How To Get The Best Weapon | Wyvern Dagger Guide

zephyrnet3 days ago

7th Global Blockchain Congress by Agora Group & TDeFi on June 21st and 22nd, 2021, Dubai.

Blockchain3 days ago

Woonkly will be the official Title Sponsor of the 7th edition Global Blockchain Congress organized by Agora Group in Dubai

Esports4 days ago

Free boxes and skins up for grabs in Brawl Stars to celebrate one-year anniversary of China release

Big Data3 days ago

.NET DEVELOPMENT

Crowdfunding2 days ago

April/May 2021 Top Campaigns

Blockchain3 days ago

Death Cross is Appearing Over Bitcoin Price Chart

Crowdfunding5 days ago

US Government Claws Back Crypto from Ransomware Scam as Feds Flex Growing Tech Muscle

Blockchain4 days ago

Bitcoin (BTC) Officially a Legal Tender in El Salvador

Crowdfunding3 days ago

US Fintech Broadridge Partners with Amazon Web Services to Expand Private Market Hub, Leveraging DLT

Blockchain2 days ago

Crypto Fund Manager Says Bitcoin ETFs to be Approved By 2022

Cleantech3 days ago

TC Energy Cancels Keystone XL Pipeline

Trending