4G Capital, the African neobank, has secured $18.5 milliom Series C funding round from private equity fund Lightrock.
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.
The investment will allow 4G Capital 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 expand its 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 Capital provides 100% unsecured business loans for business growth, along with enterprise training, and access to digital solutions. The company blends client-centric relationship management with proprietary AI technology 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%. One of the world’s top 10 Finance B-Corporations, 4G Capital has positively impacted over one million people to date.
“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.”
Shakir Merali, Partner at Lightrock, joins 4G Capital’s Board and says, “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 repairers, hairdressers and food sellers – that dot the landscape of Africa.
“The systemic value of improving lives is compounded, as productive employment leads to economic outcomes and better education and health outcomes in the communities these businesses serve.
“That’s where 4G Capital plays. That’s why we believe they are doing necessary work and why we are excited to become a part of their growth journey.”
