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Why Ghana’s Spend Management Startup Float Acquired Nigerian Accounting Firm Accounteer

August 23, 2022

A full acquisition of Accounteer, a Nigerian subscription-based cloud-based accounting service that combines bookkeeping, tax preparation, and financial advisory services all in one platform for African businesses, has been completed by Float, a Ghanaian cash flow and spend management platform, for an undisclosed sum.

This agreement comes eight months after Float concluded one of Africa’s largest seed rounds of $17 million in equity and debt seed finance. The discussion that eventually led to the acquisition reportedly began in 2021, and it took close to ten months before the sale was finalised, according to Jesse Ghansah, who co-founded Float with Barima Effah Adjei in 2021.

Why The Acquisition

Through the purchase, Float, which was established in 2020, is essentially positioned itself to become the “financial operating system” for Africa’s small and medium-sized enterprises. Accounteer will help with the inadequate and disorganised bookkeeping and accounting that Float doesn’t provide.

Swipe was established in 2020 to offer invoice services to companies by Ghansah and Adjei. However, the company changed its name to Float in June 2021 in order to give businesses credit against their receivables. In other words, it provides loans to businesses who anticipate receiving payment from clients after providing a service but urgently want cash to operate. Ghansah started OMG Digital in 2015, a media startup financed by YC, and in order to fully address his credit issue, he created Float.

After two years, Ghansah and Adjei’s business now provides a range of services. Along with its core offering of flexible credit lines for companies to cover cash flow gaps, Float also offers bill automation, vendor or supplier payments, and invoice collections. It also assists companies in connecting and managing all of their bank accounts and digital wallets from a single dashboard. Additionally, it aids users in opening business accounts, creating payment linkages, and controlling spending and budgeting. The business has added new services including rapid payments and income advances, and it is now experimenting with cross-border remittance in collaboration with businesses who provide this service.

“Most business owners are conflating their personal transactions with their business transactions,” Ghansah said, about the acquisition. “They don’t have proper accounting practices and proper bookkeeping practice in place. We wanted to fix this at scale.”

Since they [Float] recognised the accounting issue, Ghansah has been keeping an eye on a few accounting startups. He was “especially impressed with Accounteer’s trajectory over the years to become the cloud accounting software solution for 14,000+ SMBs in Nigeria and abroad,” he stated. As they grow into new markets with the 2 firms, he thinks the addition of Accounteer to Float’s ecosystem of goods and services will be revolutionary.

A Look At What Accounteer Does

The will to solve this problem for their customers led to this Accounteer acquisition.

Accounteer, a platform founded in 2015 by Merijn Campsteyn, offers users the ability to make invoices, keep track of spending, and record payments. The venture-backed startup offers accounting software that enables companies to operate off-line. Accounteer’s departure occurred as it was attempting to provide credit to its more than 14,000 members inside and outside of Nigeria.

Ghansah thinks Accounteer has established a reliable enough company and will carry on operating independently under Float. As for Accounteer bookkeeping and accounting, he stated, “Float would offer credit while we look forward to an exciting future with the team.” The majority of the Accounteer talent pool will be joining Float, according to Ghansah, although the CEO Campsetyn, who is presently assisting with the redesign and integration of both systems, won’t be working for Float full-time at this time but will act as an adviser.

With a goal to open in Kenya by the end of this year, Float is already active in Ghana and Nigeria.

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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.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh

Ghana’s Float Plans to Power Cash Flow for Commerce in Africa

January 25, 2022

Float, a leading fintech startup in Ghanaian aims to use its expertise in the cash flow management and spend niche to power e-commerce businesses in Africa. This follows a closure of a US$17 million round of debt and equity seed funding to speed its development and launch new products.

True to its name, Float provides credit lines to small businesses, as well as tools to manage business accounts and wallets in one dashboard, and tools to automate bills, vendor and supplier payments, and invoice collections. To put it simply, it aims to serve as a “financial operating system” for businesses.

Since its launch six months ago, the startup has onboarded hundreds of customers in a wide range of industries, and it now plans quicker growth after banking a US$17 million seed round. The round was led by Tinder co-founder Justin Mateen’s JAM Fund and Tiger Global, with debt financing provided by Cauris.

Kinfolk, Soma Capital, Ingressive Capital and Magic Fund also participated in the round, as well as some notable angels including Michael Seibel (YC CEO – Float is an alumni, and founder Jesse Ghansah has been through the accelerator twice), Sandy Kory (Horizon Partners), Karim Atiyeh and Eric Glyman (founders of Ramp), Gregory Rockson (mPharma) and Zach Lipson and Ross Lipson (founders of Dutchie).

Ghansah said the company will use the new capital to speed up the development of its cash management platform and launch new credit products tailored for specific business verticals and industries.

“Float set out on a mission to provide more cashflow and liquidity for millions of businesses across the continent to help them grow and reach their true potential,” he said.

“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 across Africa.”

Float hit US$6 million in credit spend and cash advanced to businesses in the first six months of going live, and has also seen its payment transaction volume increase 26x as more customers use Float to manage both their local and international business payments.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Tiger Global Turns To Ghana As US Investors Back Fintech Startup Float In $17m Seed Round

January 17, 2022

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.

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.”

Float credit Ghana — Image credits: Float

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.

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.

“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

How Float Built Africa’s First Buy Now, Pay Later Platform for Existing Credit

December 2, 2021

South Africa’s fintech start-up, Float, surprised the tech community when it launched the country’s first interest-free Buy Now, Pay Later (BNPL) product that uses a customer’s existing credit, to market. The BNPL has had tremendous impact across the country’s consumer sector and it enables buyers to get their purchases upfront and use existing credit to pay in up to 24 interest-free, fee-free equal monthly instalments. There are no applications and no credit checks, as Float uses credit already granted to the consumer by their financial institution.

Speaking on what inspired the innovative product, Float’s founder and CEO Alex Forsyth-Thompson said “it is like using the budget facility on your credit card, but interest-free.”, Forsyth-Thompson who is a Chartered Financial Analyst and a Certified Financial Planner said the idea drove him to leave the corporate world to develop the platform.

Founded in 2020, Forsyth-Thompson says Float helps consumers to be “financially responsible” while merchants see improved sales conversion rates and an increase of 30% in the size of average order values.

“Buy Now, Pay Later has flipped consumer credit on its head as consumers don’t pay exorbitant interest or fees. However, while most BNPL players are still putting new debt into the system, Float is a cash flow technology, enabling customers to stretch their existing credit further without taking on new debt. They also still get their loyalty points from their credit provider with each purchase,” Forsyth-Thompson says.

The model charges the merchant commission on each transaction and, unlike other BNPL offerings, each merchant can configure Float to suit their business’s requirements. “Because of our unique model, we are able to process purchases 10 times the size of other BNPL offerings, with far more flexible installments, and without any application process or credit check.”

Forsyth-Thompson says that while BNPL is seen as one of the hottest trends in fintech today, credit card instalment products like Float have been a way of life in places such as Brazil, Mexico, Argentina, Turkey, and Israel for many years. According to the Brazilian Association of Credit Card and Services Companies, 62% of consumers who use credit cards purchase in interest-free instalments every month. “With BNPL expected to reach more than R4.5 billion in South Africa by the end of 2021, we’re likely to see significant adoption of credit card-based instalments in our own market.”

Several prominent businesses have already signed up since Float went live in September, including Dial-a-Bed, Sloom, Arthur Kaplan, Jack Friedman, NWJ and Wits DigitalCampus, enabling their customers to use Float for Black Friday and festive season purchases. Forsyth-Thompson says Float is ideal for big ticket purchases – be it furniture, home improvement, jewellery, luxury fashion, sports equipment or education.

“Solutions like Float are institutionalised and embraced in Latin America by travel, retail and the service industries alike,” said Janlo Van den Heever, Head of E-Commerce at Dial-a-Bed.

“Effective cash flow management is a foundational principle of good budgeting, and Float enables you to make the necessary investments without extra admin or interest, today instead of tomorrow.”

When a customer is paying, they simply select Float as a payment method at checkout, choose the number of instalments and enter their Visa or Mastercard credit card details from whatever financial institution they bank with.

“We check what credit is available on their card and convert it into an interest-free repayment plan instantly, which the shopper repays via Float,” Forsyth-Thompson says.

If a shopper pays late or not at all, Float simply deducts the balance of the instalment plan from their card – much like a regular credit card transaction – after giving a week’s grace period.

“We don’t penalise our customers with late fees, which can be far more punitive than traditional interest and fees.”

Forsyth-Thompson says South Africa is an already indebted country; with 32% of credit card holders behind on repayments the problem is the ability to manage credit effectively.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry