Kenyan-based Fintech startup, Churpy, has announced the completion of its seed funding round, raising $1 million from series of investors.
The startup, which was co-founded by Kennedy Mukuna, and John Kiptum, said it would use the funds to scale its expansion into markets like Nigeria, Egypt, and South Africa.
“We are hiring more people as we plan to enter Egypt, Nigeria, South Africa, which are the hubs into their (respective) regions. We are also putting finances into product development as we plan to scale our offering,” co-founder, Kennedy Mukuna, said.
The seed funding round was led by Unicorn Growth Capital, with participations from investors like Antler East Africa, Nairobi’s business angel network, and a group of Rally Cap LPs – including senior Stripe execs.
The Fintech startup developed a SaaS-based payment platform which is used to automate payment, and process invoice reconciliation, creating a solution to the problem faced by many MSMEs which still runs manual invoicing.
“SMEs have a huge financing gap. They are the suppliers to these big companies and need capital to keep taking raw materials to their other clients. Usually, they need collateral to access loans from banks and wait for approval to access capital to keep their business going. What we are doing is ensuring that they get paid not long after they deliver goods to partner enterprises for a 0.5% origination fee. Once their invoice matures, we get paid,” Mukuna said.
Churpy, through its API, connects with regional banks like Citibank, Sidian, Stanbic and NCBA, and provides real-time transaction history to process daily accounting, and check and balancing.
The firm, which was founded last year, also plans to scale its offerings throughout its franchise. Prior to founding Churpy, both co-founders have garnered experiences in data analytics, banking, and risk management. They have worked for organizations such as the World Bank, and Citibank
“It was really not hard for us to unlock a lot of ideas, products, innovation and tech around the financial industry space. We’ve been there, we’ve seen how it works or why it doesn’t work, why it’s slow, why it is ineffective, and why customers are not happy. And so, what we are building is inspired by real experiences,” Kiptum said in an interview with TechCrunch.
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Speaking on the fundraise, Unicorn Growth Capital CEO and co-founder, Barbara Iyayi, said:
“It is clear that B2B payment operations are significantly under-penetrated and ripe for modernization and disruption globally. We are excited to partner with the Churpy team as the first mover in the market. Churpy is the only available end-to-end platform that provides accounts receivable automation, an invoice marketplace and reconciliation with integrated B2B payments specific to its markets. They are well-positioned to be a critical partner to businesses and lenders in Africa, and can effectively address the significant credit gap faced by SMEs for supplier finance and working capital.”