Cape Town-based financial comparison startup Fincheck has announced that it has fully taken over the management and equity of FundingHub, a business that helps refer South African small businesses in search of funding to 30 alternative lenders and banks. This development occurred after Fincheck acquired minority stake in the business for an unspecified amount.
The deal, as claimed by Fincheck, makes the comparison site the largest in South Africa, as well as the country’s biggest lead aggregator, having signed on 71 banks, lenders and insurers.
Fincheck’s investment in FundingHub is the second investment the platform has made ever since it launched in 2016. The startup began so consumers in the country can compare financial services products with ease.
Price comparison websites, apparently a prerogative of South Africa, allows users to compare the prices of identical products from multiple stores. They compellingly pitch consumers by helping them compare as many products as they want on their website, even though they sometimes are not as grand in servicing as advertised. These sites cover an array of industries, including travel, insurance and general items.
Fincheck is a gold member of AlphaCode, Rand Merchant Investment Holdings (RMI) incubation, acceleration and investment vehicle for early-stage businesses which can disrupt the financial services industry. When the company reaches agreed milestones with FundingHub, it will be able to increase its stake in the Cape Town-based loan comparer.
Before now, the most significant product price comparison destination in the country was PriceCheck. Founded in 2006, the company claims to be Africa’s largest product and financial services platform.
Interestingly, this does not include Google’s price comparison offering, which was unveiled in early 2017. According to a Business Insider investigation, these comparison sites are unreliable, although they are a significant start for the online bargain hunter.
FundingHub started business two years ago and has attracted average loan sizes of ZAR 300 K, with the most jumbo loan being ZAR 27 Mn. Small and Medium Enterprises (SMEs) who apply for financing on the website need to have been operating for no less than 12 months and must have at least ZAR 1 Mn in annual revenue.
The startup’s CEO, Michael Bowren, says the company allows SMEs to apply for business finance under six minutes by comparing multiple accredited finance providers to make their best choice.
“There are many different forms of finance available to SMEs. This makes it difficult for them to choose which lender is best suited to their business needs. For instance, a business may not know whether it needs equipment finance, unsecured or secured term loans, overdrafts, lines of credit, debtor finance, merchant cash advances or credit cards.
Free-to-use and independent, FundingHub, makes this really simple by filtering options and offering quotes from the most appropriate funders for their business.”
Dominique Collett, head of AlphaCode notes that “Business finance has come a long way since the days when SMEs had to approach their business bank manager, who didn’t know their business, who wanted a great deal of information and then would take around five months to revert with a no. Many of the fintechs on the FundingHub platform can put money in a business account within 24 hours.”