uKheshe, a South African fintech startup, has raised $500 000 in seed funding from FiTech Ventures and Ocean on 76. Ukheshe’s enables users to make quick payments to individuals without the need for a bank account.
It’s the second investment that uKheshe, which was founded last year by Jason Penton and Clayton Hayward has received.
Previously Indian software development house Jini.Guru — which helped to set up the business and incubate it initially as a corporate social investment initiative — invested $1-million in the company, Hayward said.
Hayward said the app, which was launched in November last year, currently has over 300 000 users.
Penton claims to have come up with the concept behind the startup’s platform when he needed to make a payment to someone who at the time did not have a bank account.
The startup’s platform consists of two parts. The first is a mobile app and the second a QR card that is linked to a recipients mobile number via Unstructured Supplementary Service Data (USSD). The startup’s platform is also certified by Mastercard’s Masterpass, which enables it to support payments from Zapper, Snapscan and other banking apps.
The startup also has an application programming interface (API) which allows seamless third-party integration with its platform. Hayward pointed out that uKheshe’s main partners are Mastercard and Pick n Pay.
The startup is now eyeing the insurance industry. Hayward explained the startup recently launched two insurance products.
These plans will likely require further funding. Hayward said the startup is looking to raise $5-million in Series-A funding which uKheshe will use for further expansion, growth and customer acquisition.
He hinted that uKheshe has “imminent” plans to launch its financial inclusion platform outside of South Africa, with the startup already in discussions around the matter.
FiTech Ventures founder and director Chris Lister-James, commenting in an earlier statement, said the firm is “excited” about its investment and the role it will play in providing sustainable financial services.
“Having invested in several early-stage fintech start-ups, we have some great complementary companies and look forward to playing both a financial and strategic role in the growth of uKheshe,” he added.
Lister-James also pointed out that significant mobile phone penetration enables fintechs like uKheshe to develop convenient, cost-effective, digital financial services solutions that can circumvent the existing financial services providers. “We view this disruption as not only positive but necessary,” he added.
Commenting in the same statement, Ocean on 76 Group CEO Prins Mhlanga pointed out that services like uKheshe’s will significantly improve financial inclusion as it offers an easy-to-use, affordable alternative.