Kenyan fintech firm, Zanifu, specializes in providing crucial inventory financing solutions to micro, small, and medium-sized businesses. In a significant move, the company has successfully secured $11.2 million in debt-equity funding during a pre-Series A funding round. This round was prominently led by two major investors, namely Beyond Capital Ventures and Variant Investments. Additionally, Founders Factory Africa, AAIC Investment, Google Black Founders Fund, and an existing investor, Launch Africa, all participated in the funding round. This notable infusion of capital brings Zanifu’s total debt-equity funding to an impressive sum of $12.7 million.

The primary focus of Zanifu lies in offering inventory credit to retailers, and the newfound funding will serve as a catalyst for the company’s expansion to also encompass distributors. According to the CEO and co-founder of Zanifu, Steve Biko, this expansion will address a similar problem faced by distributors, enhancing the company’s overall market reach. Zanifu’s mission centers on assisting businesses that struggle to access credit from traditional financial institutions due to a lack of structured financial records, accounting books, and valuable assets for collateral. Despite these challenges, these businesses require credit to sustain their ongoing operations or to fuel growth. Zanifu employs a unique approach to extending credit by leveraging data collected from both the businesses and their suppliers, effectively mitigating credit risks by directly paying suppliers on behalf of the businesses.

 Reasons Behind the Investment

Investors in Zanifu are driven by the recognition of a significant market opportunity in catering to the financial needs of micro, small, and medium-sized enterprises that are underserved by traditional financial institutions. This market gap represents a chance for Zanifu to establish itself as a crucial player in addressing the financing challenges faced by businesses that possess limited access to structured financial services. Moreover, Zanifu’s innovative data-driven approach, which utilizes underwriting algorithms to assess risk and ensure repayment, provides a strong reassurance of the company’s ability to manage credit effectively. This, coupled with the demonstrated high repayment rate of 99.2%, instills investor confidence in the viability of Zanifu’s business model.

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A Closer Look at Zanifu

Founded in Kenya in 2017 by Steve Biko and Sebastian Mithika, Zanifu is a fintech startup that specializes in providing inventory financing solutions. Established with a vision to address the financing gaps faced by micro, small, and medium-sized enterprises, Zanifu’s co-founders, Steve Biko and Sebastian Mithika, have strategically positioned the company to operate in Kenya’s dynamic business landscape. Zanifu’s primary market focus is on retailers and distributors, serving those who grapple with accessing credit due to the absence of proper financial documentation and collateral. This funding enables Zanifu to not only serve retailers but also expand its services to distributors. With an intuitive Android application, Zanifu’s customers can monitor their credit limits, place orders, and even integrate multiple payment channels for efficient repayments. The company’s commitment to supporting these enterprises extends beyond financing, with plans to offer additional financial services like insurance, inventory management tools, and bookkeeping support.

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As Zanifu’s influence grows, the company has strategically opted to deepen its presence in Kenya before venturing into other markets. This shift in focus is driven by the desire to more effectively serve a larger number of micro-SMEs and distributors while ensuring that the capital injected into the market yields substantial returns and aids in business growth. Zanifu, which operates under the regulatory purview of the Central Bank of Kenya, envisions a comprehensive financial ecosystem that empowers businesses through various services, addressing not only their credit needs but also their broader financial management requirements. The company’s determination to create a sustainable and impactful financial solution positions it as a formidable force in the Kenyan fintech landscape and beyond.

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