Futuregrowth invests R150 million in SMME funding fintech company, Sourcefin
Futuregrowth Asset Management announced a R150 million investment into Sourcefin, a South African fintech and alternative funding provider dedicated to providing access to finance and specialist supply chain support for small and medium-sized enterprises (SMMEs).
This investment was made through Futuregrowth's High Growth Developmental Equity Fund (HGDEF), further cements the firm’s strategy in supporting high-growth businesses, including the likes of hearX, Yoco, Pineapple, Retail Capital, Ozow and Cash Connect.
Founded in 2020 and a disruptor in the SMME lending space, Sourcefin is an enabler of SMMEs and addresses the R300 billion gap in SMME financing, empowering businesses to overcome working capital challenges and successfully fulfil public and private sector purchase orders.
Sourcefin said it is set to deploy more than R1 billion in funding for the financial year, ending February 2025, through its innovative platform which integrates financing, supply chain management, and end-to-end project support.
“The SMME sector is vital for South Africa's economic growth, yet traditional financing solutions often fail to meet their unique needs, particularly in government-issued orders,” Amrish Narrandes, Head of Private Equity and Venture Capital at Futuregrowth said.
“Sourcefin’s technology-first approach, coupled with their expertise in procurement and project management, has created a truly transformative solution. Their proven ability to support tender fulfilment while maintaining strong financial performance made this a compelling investment opportunity,” Narrandes said.
In opposition to traditional models, Sourcefin’s funding approach is opportunity-centric, providing a lifeline to SMMEs where more traditional funders may have declined applications for funding based on history, or a lack thereof.
A crucial contributor to socioeconomic development and improved service delivery, the SMME sector enables previously disadvantaged and minority groups to enter the economy and accounts for over 30% of South Africa’s GDP.
“There is no doubt about the massive impact that well-supported SMMEs can have on our country,” Joshua Kadish, Co-Founder, Director and CEO of Sourcefin said.
“With the support from Futuregrowth, Sourcefin’s ability to scale investment into the SMME sector significantly increases, and it is our commitment that all R150 million will be deployed as a reinvestment into the backbone of our economy,” Kadish added.
“Our investment into Sourcefin aligns perfectly with HGDEF’s mandate to back innovative businesses that drive real economic impact,” Narrandes said.
“Futuregrowth’s beginnings as the first socially oriented fund to be launched in South Africa align perfectly with a shared goal of driving real business equity and impact within the country,” Narrandes further added.
The investment comes at a pivotal time, with government spending projected to exceed R7 trillion over the next three years.
BUSINESS REPORT