South African based Sava announced that it has raised $2 million in a pre-seed funding round which includes several Africa-focused investors such as Quona Capital, Breega, CRE Ventures, Ingressive Capital, RaliCap, Unicorn Growth Capital and Sherpa Ventures.
Sava is spend management platform designed for companies to manage their expenditure using spend management tools. The platform can also be used to reconcile accounting records, digitise expense reimbursements and integrate budgets and actual cash flows.
Launched early this year by Yoeal Haile, Federico Von Bary Landesmann and Kolawole Olajide, Sava was borne out of the Yoeal’s experience while running Aspira, a lending service, which he started in 2017. He noticed that Small and Medium Enterprises (SMEs) struggled with cash flow problems and lacked access to affordable credit to grow their businesses.
So Sava intends to address these two problems by providing a platform to control spending and helping in reconciliations.
According to Yoeal, CEO of Sava in an recent interview, “The spend management model is a way not only to bring the tools that small, medium and large businesses need to run their financial operating system in the background. But also to be able to capture the data that gives you a full 360 picture of the true financial health of a business.”
“This is a problem globally, but more so in African markets, given that the banks are hesitant to lend in general. When you don’t have a dataset to help support and underwrite these businesses, that combination leads to businesses being shut out and the credit gap continuing to grow yearly. So that’s what we’re trying to solve with what we’re building,” he adds.
Understanding that businesses have a lot of financial inlets and outlets, Sava’s platform will capture all these data points such as bank accounts, mobile money accounts, payroll, invoices thereby providing one financial data view for the business to take strategic decisions.
Sava also intends to provide credit cards to clients’ employees as it will form the basis on which the company provides liquidity to its business customers. “What we’re doing is converting these debit cards to credit cards, which banks do not offer to businesses,” the chief executive said. “We will give businesses access to 30 days of credit for free, and having access to a flexible, revolving overdraft facility or working capital loan is a huge gap for thousands of businesses on the continent.”
Sava expects to make money on interchange fees on credit card transactions, subscription fees and interest income from loans. It will also charge for upselling clients on some third-party financial products like insurance
Sava is scheduled to launch its beta in South Africa in the third quarter of 2022. It also plans to launch in Kenya in Q4, and with time, it’ll look to expand into other markets like Nigeria and Egypt.
