littlefish raises $9.5 million to scale its service provider working system throughout Africa

littlefish, the South African startup constructing monetary infrastructure for small companies, has raised a $9.5 million Sequence A spherical to scale its service provider working system and develop throughout Africa.

This increase provides to a rising sample in Africa’s fintech ecosystem, the place startups are selecting to construct infrastructure for monetary establishments relatively than compete with them immediately. Whereas it’s nonetheless early, littlefish’s scale with native Tier I banks, and ongoing investor curiosity in its mannequin, recommend demand for infrastructure that helps monetary establishments serve small companies.

“littlefish has accomplished one thing uncommon: it has constructed indispensable infrastructure and satisfied Africa’s strongest monetary establishments to stake their service provider companies on it,” stated Matthieu Marchand, Principal at Partech. “With the deep belief littlefish has already established in South Africa and a transparent path to enlargement throughout greater than 10 markets, we consider the corporate is positioned to change into the defining service provider infrastructure layer for the continent. We’re proud to guide this spherical and help the staff as they scale.”

Based in Johannesburg in 2021, littlefish is positioning itself as a foundational layer for a way monetary establishments serve small companies. It combines point-of-sale functions, back-office Buyer Relationship Administration (CRM), service provider portals, funds, and Utility Programming Interface (API) right into a unified layer that permits retailers to run their companies with out switching between a number of programs.

Small companies in South Africa and throughout the continent usually run their operations on a patchwork of disconnected instruments: a point-of-sale system right here, a checking account there, an Excel spreadsheet for stock, a separate accounting package deal. That fragmentation is each operationally inefficient and more and more a safety legal responsibility; a South African research discovered that over 70% of SMEs have skilled at the least one tried cyberattack.

“Whether or not you’re utilizing on-line retailer instruments, e-commerce instruments, in-store instruments, a e-book and a pen, an Excel spreadsheet, a checking account, a pockets, or an accounting package deal, these are all of the belongings you’re anticipated to make use of these days,” Roberts stated.

Moderately than going on to small and medium enterprises (SMEs), littlefish works via monetary establishments, providing its platform as a white-labelled software-as-a-service (SaaS) product. This permits monetary establishments to ship service provider providers whereas sustaining possession of the shopper relationship.

“The largest downside we had been going to unravel helps retailers,” stated Neha Kumar, co-founder of littlefish. “I feel we will do it in a extra scalable and impactful method via the market strategy we’ve taken, which is to undergo the monetary establishments.”

International tech funding agency Partech led the spherical with participation from Proparco and returning backers similar to TLcom Capital and Flourish Ventures. It comes a 12 months after the corporate closed its seed funding spherical, which noticed participation from the identical core traders. 

The brand new capital will probably be used to develop its staff, speed up product improvement, and deepen its footprint in South Africa, the place it already works with Customary Financial institution, First Nationwide Financial institution, and Absa. littlefish will even use the funding to develop into greater than ten African markets, together with Kenya, Tanzania, Uganda, Botswana, Zimbabwe, and Zambia, alongside its present monetary establishment companions.

“We’ve confirmed the mannequin in South Africa, and this capital provides us the runway to deepen these relationships and produce what we’ve constructed to thousands and thousands extra retailers throughout the continent,” stated Brandon Roberts, co-founder and CEO of littlefish. “The little guys deserve world-class monetary infrastructure, too, and we’re constructing it.”

This strategy additionally shapes how littlefish approaches competitors. As a substitute of positioning itself in opposition to fintechs or banks, the corporate sees itself as an enabling layer throughout each gamers. 

“Our basic position is to play extra of a connector and an enabler,” Kumar stated. “The strategy we take is to not say what slice of the pie we are attempting to maintain for ourselves, however relatively what permits us to offer this related, interoperable system for retailers.”