South African startup fintech company Float has obtained funding of $2.6-million (R46-million), to scale-up its local operations, improve its proprietary technology card-linked instalment platform and lay the ground for its future market expansion – currently, the company is growing at a triple-digit rate. The funding was co-led by South African venture capital (VC) fund Invenfin (part of the Remgro group) and local investment company SAAD Investment Holdings. All of Float’s current investors also participated in the funding, while another local VC company, Lighthouse Venture Partners, both participated in, and advised on, the deal.

“This funding round represents a significant vote of confidence in our approach to responsible credit usage, our ability to deliver genuine value to both merchants and shoppers, and the international scalability of our solution,” affirmed Float founder and CEO Alex Forsyth-Thompson. “While other platforms focus on issuing new credit, we’re empowering millions of consumers to manage their existing credit better, while further unlocking a multitrillion-dollar opportunity for merchants.”

This latest funding followed Standard Bank’s provision, last year, to Float, of an $11-million (R200-million) facility. This gave the startup access to growth capital. 

Float provides shoppers with a new way to manage their credit, by dividing their payments into monthly instalments that are free of interest and of fees. It did not issue any new credit, nor did it charge late fees. It did not have any signing-up, registration or credit checking processes. It currently serves more than 2 000 stores, including major brands such as Cape Union Mart, Dial-a-Bed, iStore, Samsung, and Tiger Wheel & Tyre. Since Float was launched in 2021, its transaction volumes have increased by 400% year-on-year.

“Float has created a genuinely differentiated proposition in the South African payments landscape, with its card-linked approach addressing a clear market gap while promoting responsible credit usage,” pointed out Invenfin investment executive Theo van den Berg. “The company’s impressive market traction, combined with its experienced management team and scalable technology platform, makes this an extremely compelling investment opportunity in the fast-growing fintech sector.”

“At SAAD we love backing impressive entrepreneurs who are busy scaling remarkable businesses – Float ticks both these boxes for us and we’re excited for what the future holds for Alex and [the] team,” highlighted SAAD private equity principal Johann Snyman.