4G Capital, the award-winning African neobank, has completed its Series C funding round with Lightrock, the leading global private equity fund, investing $18.5 million dollars.
Since its inception in 2013, 4G Capital has loaned over 1,750,000 small business working capital loans valued at over $230 million. The company has over 240,000 clients, 81% of whom are female, with 77% running micro and SME enterprises in rural areas.
“We are delighted to partner with Lightrock to further our financial inclusion mission,” said Wayne Hennessy-Barrett, CEO and Founder of 4G Capital. “Lightrock and 4G Capital share a complete alignment of purpose and mission. They bring unrivalled experience of Africa and emerging markets. This capital will have a transformative effect in enabling us to scale the best products and services to the world’s most important sector.”
The investment will allow the company 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.
This also allow them to expand their Kuza retail finance service to help store-owners, FMCGs and distributors boost their sales. Kuza is a pure fintech plug-and-play service, allowing distributors to stock entrepreneurs using 4G Capital’s credit, rather than traditional cash on delivery. Partnerships with P&G, Diageo and other brands adopting the service have proven highly successful.
4G’s Capital highly scalable and capital-efficient model has resulted in return for $9 million raised from 2016-to 2020, the company has loaned over $230 million. The microfinance industry has an average lending to capital ratio of 3.45, yet 4G Capital has loaned over 16 times its capital raised.
“Often used to justify the backing of many African companies, ‘Financial inclusion’ has not always translated into positive outcomes for customers. What is needed on the continent is investment capital to back companies with the mission of financial empowerment. 4G Capital provides liquidity to the vast market of economically generative businesses – the mobile phone repairs, hairdressers and food sellers – that dot the landscape of Africa.”Shakir Merali, Partner at Lightrock.