South African app for local investment Franc has launched Franc Business, a business-to-business (B2B) solution, after raising R8 million in seed capital. 4DX Ventures, a Pan-African-focused venture capital firm, contributed to the money.
Dr Thomas Brennan, an engineer and former head of digital innovation at Discovery Health, and Sebastian Patel, an actuary with 17 years of experience in financial services, founded Franc in 2017.
They came up with the concept out of irritation with the difficulties and restrictions to investing in the stock market, as well as worry about the low rate of investment among South Africans (less than 8%) outside of retirement products.
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The mobile app allows users to invest in money market funds (Allan Gray Money Market Fund) and exchange-traded funds (ETFs) (Satrix 40 ETF). Users can invest as much as they want, when they want, using the mobile application.
The latest round of funding will go toward the fintech company’s B2B initiative, which allows businesses to offer quality investment products to their own consumers by utilizing Franc’s application programming interface (API) and license.
“With Franc, consumers may start investing within minutes of installing the app and, if necessary, recover their assets within a few days of requesting a withdrawal using the app,” explains Brennan, Franc’s CEO.
“The simplicity and low cost of Franc Business are its advantages. We provide a single API as a B2B play, which allows us to swiftly and effectively interface with client platforms.”
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Despite the challenges of COVID-19, the firm claims that many South Africans are using the app for the first time to invest and save for a rainy day.
“Franc Business clients can allow their customers start saving or investing instantly, without the headache of regulatory red tape and extensive technical development,” says Patel, Franc’s COO.
According to Patel, Franc Business is aimed at any platform with a value store or partners looking to expand their existing product offering, such as short-term or life insurers, neo-banks, HR/payroll providers, buy-now-pay-later, and early salary access providers.
Peter Orth, managing partner at 4DX Ventures, comments on his firm’s choice to invest in Franc: “We’re committed to making it easier for everyone to save and invest, as it’s a crucial component of building wealth over time. We believe Franc has a terrific vision for how they can accomplish this in South Africa, and we are pleased to support them.”
The Allan Gray Money Market Fund returned roughly 4.5 percent over the last 12 months, whereas the Satrix 40 ETF returned 12 percent interest per year on average over the last three years and 10 percent interest per year on average over the last five years.
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“Given consumer awareness of the need to save and the exponential growth in digital adoption of financial services products, we believe the time is most appropriate for the Franc Business savings and investment solution as a market value-add,” Patel adds.
South African Franc investment South African Franc investment
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
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