SOUTH AFRICA – Sava Africa, a spend management platform, has raised US$2 million in pre-seed funding to launch its beta in South Africa in Q3 of this year.
The funding was from numerous Africa-focused investors, including Quona Capital, Breega, CRE Ventures, Ingressive Capital, RaliCap, Unicorn Growth Capital, and Sherpa Ventures.
Sava also intends to start in Kenya in Q4 and, with time, expand into additional regions like as Nigeria and Egypt.
Sava, founded in 2021 by Yoeal Haile, Federico Von Bary Landesmann, and Kolawole Olajide, focuses on two distinct pain areas that organisations face: expenditure management and reconciliations.
One, firms lack the tools necessary to manage their expenses. Two, business owners and their teams devote a significant amount of time to manual record-keeping and reconciliations, and they lack sufficient data to lend sensibly.
“During my time at Aspira, when I was working with about 100 retail partners, I noticed that a lot of them struggle to stay on top of the cash flows and then manage their finances,” founder Yoeal Haile said.
“Most of them were shut out of access to the traditional credit market. Ultimately, with nobody serving them, we saw this as an opportunity to shift from doing consumer finance to doing more SME and business finance.”
Sava is positioned itself to assist organisations in controlling expenditure through the use of spend management technologies, reconciling accounting records, digitising expense reimbursements, and integrating budgets and actual cash flows.
“The spend management model is a way not only to bring the tools that small, medium and large businesses need to run their financial operating system in the background. But also to be able to capture the data that gives you a full 360 picture of the true financial health of a business,” CEO Haile said.
“This is a problem globally, but more so in African markets, given that the banks are hesitant to lend in general.
When you don’t have a dataset to help support and underwrite these businesses, that combination leads to businesses being shut out and the credit gap continuing to grow yearly. So that’s what we’re trying to solve with what we’re building.”
In the future, the South African fintech intends to issue credit cards to clients’ staff as a means of providing liquidity to its business customers.
Sava plans to generate revenue from interchange fees on credit card transactions, subscription fees charged to businesses who access its platform, and interest income from provided loans. Additionally, it must upsell clients on third-party financial goods, such as insurance.
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