African neobank 4G Capital completes Series C round
African neobank 4G Capital has completed a Series C funding round which has seen global private equity fund Lightrock invest $18.5 million.
Since its launch in 2013, 4G Capital has made over 1,750,000 small business working capital loans valued at over $230 million. The company has 240,000+ clients, 81% of whom are female, with 77% running micro and SME enterprises in rural areas.
4G Capital says the investment will allow it to scale its last-mile finance and enterprise training solutions to micro and small enterprises (MSEs) in Kenya and Uganda, expanding its use of digital channels and data science to complement its hybrid ‘touch-tech’ approach.
The company will also expand its Kuza retail finance service, which allows distributors to provide stock to retailers using 4G Capital’s credit rather than traditional cash on delivery.
4G Capital has partnerships with P&G, Diageo and others. It provides 100% unsecured business loans, as well as enterprise training and access to digital solutions. The company combines relationship management with proprietary AI technology to seek to minimise default risk.
4G Capital’s clients maintain high repayment rates (around 94%) without the need for refinancing. On average, customers increase their annual revenue by 82%.
During the pandemic, it continued to lend, reduced prices by 10%, waived all penalty fees for all historical clients, provided Covid health insurance cover with partner company Turaco, and distributed free masks and sanitisers through its branch network. By supporting many small businesses to survive the crisis, the company says it was rewarded with “exceptional levels of client loyalty”. 4G Capital’s revenues for 2021 were 85% higher than in 2020.
In terms of the new capital, Wayne Hennessy-Barrett, CEO and founder of 4G Capital, says it will have “a transformative effect” in enabling the firm to scale its products and services.
Shakir Merali, partner at Lightrock, is also joining 4G Capital’s board.