Float, a Ghana-based startup that gives credit lines to businesses, has secured $17 million in capital, which it plans to use to expand its capabilities and geographically.

The seed round consisted of a $7 million equity investment and a $10 million debt investment. While Cauris provided debt funding, Tiger Global (New York, USA) and JAM Fund, Tinder co-founder Justin Mateen’s investment business (Nevada, USA), co-led the equity portion. Kinfolk (USA), Soma Capital (California, USA), Ingressive Capital (Nigeria), and Magic Fund (California, USA) are among the other VC firms investing in the equity round.

Y Combinator CEO Michael Seibel (USA), Sandy Kory of Horizon Partners (USA), Ramp founders Karim Atiyeh and Eric Glyman (USA), Gregory Rockson of mPharma (Ghana), and Dutchie founders Zach Lipson and Ross Lipson (USA) were among the angel investors who featured in the latest investment.

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Float, which is already present in Ghana and Nigeria, plans to utilize the fresh money to establish presence in Kenya and South Africa by the second quarter of this year, as soon as it obtains operating licenses.

The money will also be put towards improving the company’s cash management platform and launching new credit solutions targeted at specific business verticals and industries.

“Float set out on a mission to provide more cash flow and liquidity for millions of businesses across the continent to help them grow and reach their true potential,” said the chief executive, Jesse Ghansah, in a statement.

“With this new funding, we will continue to refine both our credit and software products to deliver the best experiences for our fast-growing customer base. We are excited to be the growth partner of choice for businesses in Africa.”

Why The Investors Invested

Investment into Float was inspired mostly by the quality of the startup’s team. CEO Jesse Ghansah is now getting the backing of the prestigious US accelerator Y Combinator for the second time. Ghansah previously led OMG Digital, a media company he founded which also got into YC in 2016. OMG Digital, raised $1.1 million in seed funding in 2017. 

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But then again, the startup has generated considerable traction since it was founded barely two years ago. Hundreds of enterprises from a variety of industries have signed up for Float’s cash flow management and expenditure platform in the seven months since its introduction, including retail and manufacturing, fintech, e-commerce, media, and health. In that period, Float has also spent $10 million on credit and made cash advances to enterprises. The company says that the volume of payment transactions (invoicing and vendor payments) has increased 26 times.

A Look At What The Startup Does

CEO Jesse Ghansah founded Swipe alongside Barima Effah in 2020, and after a rebranding as Float, the firm went live with its product in June 2021.

Float offers loans to businesses that are unable to obtain them from traditional banks.

Float also provides software solutions for businesses to manage accounts and wallets in one dashboard, as well as automate invoices, vendor or supplier payments, and invoice collections, in addition to flexible credit lines for businesses to bridge cash flow shortages.

The company aspires to be Africa’s “financial operating system” for small and medium-sized businesses.

Invoice advance, opening a business account, payment linkages, budget management, and spend cards are among the platform’s other capabilities.

Revenue advances and fast payouts are two new features that the company has lately launched. With the latter, Float hopes that small firms can use its platform to rapidly access their profits rather than relying on gateways, which can take days to process. Its invoice factoring service enables firms with unpaid invoices to receive cash advances.

All of these elements, according to Ghansah, provide numerous types of credit for diverse industries and verticals across the continent.

“The big challenge is that credit needs of businesses are very different. The credit needs of retail are very different from the credit needs of a services business, or the credit needs of agriculture, business or pharmaceutical or medical supplies businesses,” said the chief executive.

“So we are trying to dig deep into which credit products work for certain verticals. And so that’s what we’ve been working on so far.”

The startup claims to be unique among competitors since it provides businesses with both financial and software services at the same time. Then, instead of outright pricey loans, provide conveniently available flexible and short-term working capital.

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“I think that a part of how we differentiate ourselves is just how flexible our credit is, in terms of the speed of access, how quickly you can draw down on credit,” said Ghansah. “And then, like it’s flexible in terms of how you can just take it out for a day and then repay the next day, for example.”

Float credit Ghana Float credit Ghana Float credit Ghana

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer