SOUTH AFRICA – ProfitShare Partners, a South African startup, has secured a US$1.7 million capital line from the Vumela Fund to further address the lack of capital available to SMEs.
The Vumela Fund, which is managed by Edge Growth Ventures, has the mandate of supporting high-growth SMEs in the banking supply chain with good economic and impact returns.
According to Disrupt Africa, Vumela has forwarded a US$1.7 million capital line to ProfitShare Partners, which utilises tech to fast-track SME performance and delivery through its profit-sharing business model.
As a short-term capital partner to small business owners, the fintech company also provides the professional expertise and guidance.
The funding from the Vumela Fund will help ProfitShare Partners in addressing funding gaps for SMEs, with the startup committed to offering immediate capital solutions to SMEs requiring cashflow to deliver on their contracts and purchase orders in the supply chain of large corporates.
“We have every confidence that ProfitShare Partners will deliver on the mandate of the fund,” said Mike Sage, trustee of the Vumela Fund.
“The results they have already shown will bring exceptional value to the objectives we wish to achieve – creating and supporting high-growth SMEs. The impact that we’ve seen is impressive and we look forward to accelerating this over the next two years,”
Andrew Maren, founder and chief executive officer of ProfitShare Partners, said he was excited to have secured the confidence of an established fund like Vumela to continue enabling the SME market through short-term capital solutions.
“We have unlocked an insatiable market for our offering and the commitment from the Vumela Fund is indeed encouraging to reach more SMEs and create an even greater impact in the market,” he said.
“We’ve managed to grow our book value 400 per cent in one year, highlighting the demand for this type of capital. Each successful deal raises the profile and profitability of our SME clients – ultimately, we want to grow small businesses to become financially sustainable and lose them to traditional financial institutions. That’s when we know we have truly helped our SMEs.”