Sourcefin, a South African fintech company specializing in alternative funding for small and medium-sized enterprises (SMMEs), has raised R150 million ($8.3 million) in funding from Futuregrowth Asset Management. The investment, made through Futuregrowth’s High Growth Developmental Equity Fund (HGDEF), aims to empower SMMEs by addressing the country’s substantial funding gap for these businesses.
Founded in 2020 by Joshua Kadish, Avi Mishan, and Marom Mishan, Sourcefin offers financing solutions tailored to SMMEs’ unique needs, such as purchase order funding and invoice discounting. These services are underpinned by a proprietary technology platform that integrates financing with supply chain management and project support. By the end of its current financial year in February 2025, the company is set to deploy over R1 billion ($55.4 million) in funding.
South Africa’s SMMEs face a financing shortfall estimated at R300 billion ($16.6 billion), a challenge compounded by traditional lenders’ reluctance to extend credit due to perceived risks. Sourcefin’s platform bridges this gap by supporting government-issued tender fulfilment and other procurement projects. Over 90% of its client base includes minority demographics, such as Black female-owned and youth-owned businesses, as well as rural-based entrepreneurs.
“The SMME sector is vital for South Africa’s economic growth, yet traditional financing solutions often fail to meet their unique needs,” said Amrish Narrandes, Head of Private Equity and Venture Capital at Futuregrowth. “Sourcefin’s technology-focused approach, coupled with their expertise in procurement and project management, offers a transformative solution.”
The investment in Sourcefin aligns with HGDEF’s mandate to support high-growth, impactful businesses. HGDEF has previously invested in several prominent companies, including fintech firms Yoco, Ozow, and Retail Capital (which was acquired by TymeBank in 2022), as well as health-tech startup hearX. Sourcefin joins this portfolio as a strategic partner, with Futuregrowth’s backing set to enhance its operations and expand its nationwide footprint.
“With the support from Futuregrowth, Sourcefin’s ability to scale investment into the SMME sector significantly increases,” said Joshua Kadish, co-founder and CEO of Sourcefin. “All R150 million will be deployed to reinforce the backbone of our economy.”
Sourcefin’s platform connects clients with a network of over 2,000 pre-vetted suppliers, both local and international. Its advanced technology ensures operational efficiency and robust risk management. The fintech’s focus on innovation has enabled it to address bottlenecks that often hinder SMMEs, such as working capital constraints and procurement complexities.
Futuregrowth, one of South Africa’s leading developmental investors, manages over R194 billion ($10.7 billion) in assets across more than 50 funds. The HGDEF, launched to support early-stage, high-growth businesses, aims to address social and economic challenges while delivering competitive returns. Its investments span multiple sectors, including infrastructure, clean energy, and agriculture.
“We source innovative businesses by backing South African entrepreneurs who take risks and disrupt industries,” said Narrandes. “This aligns with Futuregrowth’s mission to drive meaningful economic and social impact.”
The partnership between Sourcefin and Futuregrowth underscores a shared commitment to fostering economic growth and inclusivity in South Africa. With this latest investment, Sourcefin is poised to strengthen its position as a key enabler of SMMEs, driving job creation and innovation in a critical sector of the economy.