Idan Jaan and Jared Noche are two young entrepreneurs who have developed a funding process to help established small businesses to access funding.
We spoke, on this episode of Futures Facets, about the needs small businesses have for funding, and their challenges.
Fundrr provides some challenging statistics to consider:
- There are 2.4 million SMEs in South Africa with over a million of those being in the formal sector.
- There is also an R86 billion funding gap that these enterprises need in order to grow and where they mostly cannot access funds from traditional funding mechanisms such as banks.
There are many angel investors set up to help with new start ups, but Fundrr is particularly focussed on the established business, already in business for at least a year, and with a financial record and turn over of over R1 million for that period. They base their funding decisions, which can be for capital expansion, cash flow or stock, on the results of an online application form that allows them to assess different data points, including the businesses social media and marketing activity.
In fact, Fundrr’s main innovation lies in this area - creating an online application tool that they claim can be completed in 8 minutes. They know that a company of this size doesn’t have all the projections, accountants reports and documentation that a traditional funder would require, so they have created their own algorithm and platform to gather the data that they need.
Having gone through their own start up challenges, Jaan and Noche are very much on the side of small business and it is encouraging to see how committed they are to making their business work, to help other businesses succeed.
Fundrr has a goal of providing funding of R1 billion to South African small businesses over the next 5 years. It is a goal we highly applaud.
Jaan and Noche also explained that they have had the support of fintech incubator, Alpha Code Club.