SOUTH AFRICA – Cape Town-based fintech Finch Technologies has “significantly” upped its investment in finance marketplace FundingHub inorder to boost Small and Medium Enterprises funding, the company has announced.
In a statement, Finch Technologies says its investment will see it become the majority shareholder in FundingHub.
“We made a second investment in FundingHub, due to its dramatic growth over the past 18 months,” states Michael Bowren, Finch Technologies Chief Executive Officer.
“We are confident about the ongoing expansion of this business. We are particularly interested in investing in technology-driven businesses that help financial service providers originate sales, onboard new clients in a seamless manner and enrich their own database.”
Finch Technologies is the holding company of online financial products comparison portal Fincheck a financial comparison marketplace that aims to help consumers and businesses find the most appropriate finances for their needs.
According to the statement, FundingHub offers South African Small Medium Enterprises (SMEs) access to finance through 30 alternative lenders and banks.
The business, which started four years ago, allows Small Medium Enterprises to compare funding solutions at no charge, from US$699 up to loans of over US$6.99 million.
“Finch Technologies is rapidly evolving both our marketplaces, Fincheck and FundingHub, to provide an end-to-end solution. This means both platforms will allow South Africans to apply for financial and insurance products, upload the relevant documents and compare, in real-time, the offers that banks, lenders and insurers have available. This is a significant advance in the South African market and a necessary move towards an open financial ecosystem,” said Bowren.
“Since the start of COVID-19, FundingHub has seen a dramatic increase in requests for financing from SMEs. This is for two main reasons. The first is SME distress and their struggles to manage cash flow. The second has been the inability or reluctance to visit a physical bank branch,” he added.
“SME owners are therefore searching and comparing options online. Businesses and lenders have therefore been driven to accept a full digital solution which encompasses the vision of Finch Technologies, which is moving toward a full end-to-end marketplace, offering everything short of disbursing the final product,” he concluded.
This latest investment by Finch Technologies follows an initial one made in 2019, with FundingHub’s growth in recent years the driver for Finch wanting a greater stake.
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