WellaHealth and Flex Finance, both from Nigeria, and South African startup PayMeNow are among six startups joining Catalyst Fund’s newest cohort of startups to be funded for their work on financial inclusion.
Each of them will receive £80,000 (about $100,000) in grants with Catalyst, a US-based accelerator, having no equity stake. The programme is focused on startups in emerging markets, providing customized venture building support and finance to propel early-stage growth.
Yemi Olulana, founder and CEO of Flex Finance, connected with the Catalyst Fund after his startup pitched and won $100,000 at a demo event by Accion Venture Lab, a Washington DC-based seed-stage investment initiative, during the Nigeria Fintech Week in October 2019.
Flex Finance’s solution aims to track expenditure and manage spending for small businesses. The startup’s mobile app went live in April this year and has garnered about 1,000 users, Olulana tells TechCabal.
He expects the accelerator’s bespoke startup support model to become an extra operational lever that helps the Flex Finance team solve already identified problems and build capacity for scale.
This year’s startups are operating within the context of a pandemic that has highlighted variations in financial resilience between populations. But there is an opportunity for technology to “help low-income consumers and small businesses recover from the impact of COVID-19 and build greater financial resilience for the future,” said Maelis Carraro, Catalyst Fund Director.
WellaHealth, a health tech startup, has witnessed increased visibility of its health insurance and medical care financing products since mid-April. Ikpeme Neto, the company’s founder, believes joining the accelerator will help WellaHealth improve healthcare access and affordability to Africans.
“We are excited to leverage their experience and expertise to help us accelerate towards our goal of serving millions of people across Africa with affordable healthcare,” Neto tells TechCabal.
Launched in 2016, Catalyst Fund is managed by BFA Global, a consultancy founded by David Porteous, a South African, with offices in the US and Kenya. Funding support is provided by the UK Department for International Development, and JP Morgan Chase, while Rockefeller Philanthropy Advisors offers fiscal support.
The 2020 cohort of startups are beneficiaries of the $15 million Catalyst raised in January from its funding partners, which was slated to go into accelerating 30 new fintech startups across Kenya, Nigeria, South Africa, Mexico, and India. Those startups have to be working on solutions that are inclusive, affordable and accessible for underserved customers by 2022.
PayMeNow, the South African startup, gives low-income workers access to a portion of their earned wages before payday, as a stop-gap source of finance for necessities. Founded in 2019 by Bryan Habana, a former South African rugby player, they recently secured $231,000 seed investment.
Startups in this cohort – which includes Mango Life, Graviti (both from Mexico) and Karmalife (India) – were nominated approved by an advisory committee of investors, including Anthemis, Quona Capital, 500 Startups, Flourish Ventures, Accion Venture Lab and Gray Ghost Ventures.
Flex Finance was nominated by Accion Venture Lab. Beyond the funding they receive, participating in the accelerator gives these startups access to a larger pool of investors and corporate bodies affiliated with the likes of JP Morgan Chase, and the Bill and Melinda Gates Foundation.
Olulana believes that could give his startup a boost in future fundraising efforts.