Sava raises $2 million
The pre-seed funding round included several Africa-focused investors, including Quona Capital, Breega, CRE Ventures, Ingressive Capital, RaliCap, Unicorn Growth Capital and Sherpa Ventures.
Sava highlights two specific issues businesses face regarding expense management and reconciliations. First, companies lack the tools to control their spending. Additionally, business owners and their teams spend many hours maintaining records and performing manual reconciliations and lack sufficient data to lend prudently.
In African markets, since banks are reluctant to lend in general, it is difficult to maintain a business. When there is no data set to help support and guarantee these businesses, this combination causes businesses to close and the credit gap to continue to grow every year.
Retailers struggle with cash flow issues and lack access to affordable credit to grow their businesses. While banks have strict credit policies and don’t care much about small businesses, especially those with no local credit history or track record, informal lenders act like loan sharks to the detriment of these businesses.
As Sava’s co-founders also encountered expense management issues while running their past businesses, they decided to use an expense management model like Brex, Ramp, and Jeeves to launch Sava.
The Expense Management model is a way to bring the tools that small, medium and large businesses need to run their financial operating system behind the scenes. It can also capture the data that gives a complete 360-degree picture of a company’s true financial health, according to Sava’s CEO.
Additionally, in addition to credit bureaus, spend management platforms such as Sava are required to use other mediums to assess the viability of consumer and business credit. Africa is home to one of the highest mobile money penetrations and has decent usage of bank accounts. As such, Sava, which has yet to launch, claims that it combines bank accounts, mobile wallets, payment and accounting integrations into a single platform.
With this, Sava says it will help businesses control expenses using expense management tools, reconcile accounting records, digitize expense reimbursements, and integrate budgets and actual cash flow. .
However, Sava still plans to provide credit cards to customers’ employees as they will form the basis on which the company will provide cash to its business customers. They will give businesses free access to 30 days of credit, and access to a flexible, revolving overdraft facility or working capital loan can be a huge gap for thousands of businesses on the continent.
Sava intends to earn money from interchange fees on credit card transactions, subscription fees when businesses access its platform, and interest income from loans issued. It must also sell certain third-party financial products such as insurance to its customers. Sava plans to launch its beta in South Africa in the third quarter of 2022. Sava also plans to launch in Kenya in the fourth quarter, and over time it will look to expand into other markets like Nigeria and India. Egypt.