Sourcefin Secures $8.2M to Enhance SME Financing in South Africa

South African fintech company Sourcefin has managed to raise ZAR150 million (approximately $8.2 million) in funding from Futuregrowth Asset Management. This large amount of funding is expected to help Sourcefin expand its goal of offering accessible financing solutions to small and medium-sized enterprises across the country.

About company

Sourcefin is a company founded in 2020 with a focus on providing financial solutions to address the challenges that small and medium-sized enterprises in South Africa face. The firm provides alternative funding solutions and specialist supply chain support to enable businesses to break through working capital constraints and successfully fulfill public and private sector purchase orders.

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Funding Details

The recent investment of ZAR150 million was made available by Futuregrowth’s High Growth Developmental Equity Fund (HGDEF). Futuregrowth is one of the leading asset management companies that has a history of supporting high-growth businesses that contribute to economic development. This investment further cements Futuregrowth’s strategy in supporting high-growth businesses, including the likes of hearX, Yoco, Pineapple, Retail Capital, Ozow, and Cash Connect.

Strategic Objectives

With this influx of capital, Sourcefin plans to:

• Expand Funding Deployment: The organization is due to deploy over ZAR1 billion in funding in the year ending February 2025 with its innovative platform, enhancing its ability to support the SME sector way above earlier levels.
• Advance Technological Infrastructural: Invest further in emerging technologies to have a proper streamlining of and perfect optimization of its solutions in order to ensure smoothened integration and end-user experience for SMEs.
• Increase market coverage: This means expanding its services to a greater range of SMEs cutting across different industries to contribute towards the overall economic growth of South Africa.

Leadership Perspective

Co-Founder, Director, and CEO of Sourcefin, Joshua Kadish said, “There is no doubt about the massive impact that well-supported SMMEs can have on our country. 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.”

The SMME sector is crucial to South Africa’s economic growth, yet the conventional financing solutions typically don’t work for them or don’t fit their needs, mainly when it comes to government-issued orders. 

Sourcefin’s technology-first approach combined with their expertise in procurement and project management resulted in a truly transformative solution. Their proven ability to support tender fulfillment while maintaining solid financial performance made this a compelling investment opportunity.”

Market Context

Small and medium-sized enterprises constitute the backbone of the economy in South Africa; therefore, they are integral and make a significant contribution in providing employment and GDP. More importantly, most SMEs, while dealing with government-issued orders, face barriers accessing traditional financing. Therefore, Sourcefin’s solution brings forth innovative financial arrangements custom-designed to meet unique demands.

Product Offerings

Sourcefin provides all support services for SMEs:

• Working Capital Solutions: Funding for everyday activities and to complete big orders without feeling financially squeezed.
• Supply Chain Support: Helping small and medium enterprises in terms of procurements and maintaining a supplier base.
• Tender Fulfillment Assistance: Helps small and medium enterprises successfully tender for and implement government and private sector contracts by providing the needed financing. Technological Infrastructure

Sourcefin’s platform utilizes modern technology to deliver efficient and effective financing solutions. With its technology-first approach, the company makes sure that SMEs gain quick access to funds, ensuring that financial operations are easy to manage for the business while helping them remain competitive in the market.

Client Base and Partnerships

Since its establishment, Sourcefin has supported numerous SMEs across a variety of sectors in South Africa. By partnering with Futuregrowth, the company aims to further extend its reach and impact by giving even more businesses the financial tools needed to succeed.

Future Outlook

With the significant investment from Futuregrowth, Sourcefin is expected to make a big impact in the SME financing landscape of South Africa. The commitment of the company to deploying over ZAR1 billion in funding by February 2025 shows its commitment to empowering SMEs and contributing to the nation’s economic development.