Kenyan fintech startup, Churpy, has raised $1 million in seed funding to expand across Africa by setting up hubs in Nigeria, Egypt, and South Africa.
The seed round was led by Unicorn Growth Capital and saw participation from Antler East Africa (following on after a $100,000 pre-seed), Nairobi business angel network and some of Rally Cap’s LPs, including senior executives from Stripe.
The startup said it wants to transform how businesses manage their customers’ debt owed to them through its Software as a service (SaaS) product – which automates the labour-intensive processes of reconciling incoming payments and invoices that are still predominantly manual for most local companies.
In addition, the startup said it is set to roll out a working capital financing product targeting small-medium enterprises supplying to the enterprise customers that are signed up to the startup’s SaaS product.
Speaking on its plan to enter other African countries, Kennedy Mukuna, Churpy co-founder, said, “We are hiring more people as we plan to enter Egypt, Nigeria, South Africa, which are the hubs into their (respective) regions. We are also putting finances into product development as we plan to scale our offering.”
On its SME plan, Makuna pointed out that the SMEs benefit from immediate payment for goods delivered to these enterprises instead of waiting for months to receive their money.
He said, “SMEs have a huge financing gap. They are the suppliers to these big companies and need capital to keep taking raw materials to their other clients. Usually, they need collateral to access loans from banks and wait for approval to access capital to keep their business going. We are ensuring that they get paid not long after they deliver goods to partner enterprises for a 0.5% origination fee. Once their invoice matures, we get paid,”
Barbara Iyayi, co-Founder and CEO of Unicorn Growth Capital, said, “It is clear that B2B payment operations are significantly under-penetrated and ripe for modernization and disruption globally. We are excited to partner with the Churpy team as the first mover in the market.
“Churpy is the only available end-to-end platform that provides accounts receivable automation, an invoice marketplace, and reconciling integrated B2B payments specific to its markets. They are well-positioned to be a critical partner to businesses and lenders in Africa, and can effectively address the significant credit gap SMEs face for supplier finance and working capital.”
