In a notable expansion of its investment portfolio, TLcom Capital has made its first foray into the South African market by investing in fintech startup LittleFish. The move highlights TLcom’s growing interest in Africa’s southern region, a shift from its traditional focus on East and West African markets. LittleFish, co-founded in 2021 by Brandon Roberts and Miod Davith Kahwa, is a South Africa-based fintech aiming to bridge the financial services gap for small and medium-sized enterprises (SMEs) across Africa.

TLcom’s decision to back LittleFish comes at a time when the fintech landscape in Africa is evolving rapidly. The continent is home to over 80 million SMEs, representing a key driver of employment and economic activity. Despite their critical role, many of these businesses remain underserved by both traditional banks and fintech firms, often lacking access to tailored financial services that address their unique needs.

LittleFish seeks to address this gap by offering a comprehensive digital platform that enables banks to better serve SMEs. By partnering with financial institutions, the startup provides a range of services — from streamlining financial operations to offering digital payment processing and facilitating access to credit. This partnership model allows banks to retain their SME clients while offering a more agile and customer-focused solution, positioning LittleFish as a key enabler in the market.

TLcom’s First South African Venture

For TLcom, the investment in LittleFish represents its first venture into South Africa, a market that has seen increasing fintech activity in recent years. Speaking on the investment the firm noted that LittleFish stood out as a company with both the ambition and the execution capability to address one of the most critical challenges on the continent — supporting SMEs through better financial services.

The firm highlighted several factors that influenced the decision to invest, including the strength of LittleFish’s founding team and its partnerships with established financial players like Visa.

Brandon Roberts, CEO and co-founder of LittleFish, launched the company with a clear mission: to empower African SMEs by providing them with better access to financial tools that meet their specific needs. 

Roberts’ background in enterprise software and his understanding of the African fintech landscape were key elements that caught TLcom’s attention. His decision to leave a successful corporate career to build LittleFish early in his entrepreneurial journey also resonated with the venture capital firm.

Africa’s SME sector presents a substantial market opportunity. According to McKinsey, 80 to 90 million SMEs across the continent are moving towards digital operations, including online trading and digital payments. This segment is projected to generate $13 billion in payments revenues by 2025, growing at a rate of 30% annually. However, traditional banks have struggled to serve this market effectively due to limitations in their digital capabilities and proximity to customers.

LittleFish’s model seeks to address these shortcomings by offering banks a B2B solution that allows them to better serve the SME sector. Through its platform, banks can provide their clients with a seamless, all-in-one digital solution that covers key areas such as financial management, digital payments, and access to working capital.

TLcom’s investment in LittleFish is seen as a strategic move to tap into this growing sector, with the potential for significant returns as more SMEs embrace digital financial services. The fintech’s partnership with Visa further enhances its market position, offering it a foothold in a network of established banking relationships.

While the immediate focus for LittleFish is on South Africa and neighboring markets, both TLcom and the startup’s founders see potential for expansion beyond the continent.

Flourish Ventures is also co-investor in the round, has also expressed confidence in LittleFish’s growth trajectory. 

TLcom’s entry into South Africa is part of its larger strategy to diversify its investments across Africa’s key markets. The firm has previously backed high-profile tech companies in Nigeria, Kenya, and Egypt, including Andela, Twiga Foods, and Kobo360. By expanding into South Africa, TLcom is positioning itself to capitalize on the country’s growing tech ecosystem, which has attracted increasing attention from investors in recent years.

As TLcom continues to expand its portfolio, its investment in LittleFish underscores the firm’s belief in the importance of financial inclusion and the transformative potential of fintech across Africa. For LittleFish, the backing of a seasoned investor like TLcom offers the resources and strategic support needed to scale its operations and deliver on its mission of reconnecting banks with the continent’s SMEs.