Businesses in Africa are expected to spend $4.2 trillion by 2030 on business-to-business transactions, up from $1.6 trillion in 2015, with the biggest sectors being agriculture, manufacturing, construction, and transportation. Managing B2B spend, however, is still a manual task that is slow, error-prone, and disjointed–issues that can lead to higher operating costs and impede lender underwriting.
Enter Flex Finance, an all-in-one platform that helps businesses in Africa digitize their B2B spend–from expense tracking and management, to vendor payments and employee corporate cards. The company offers financial management solutions across all major commercial payment channels, including mobile, web, and corporate cards–similar to Brex in the U.S., Spendesk in Europe, and Clara in Latin America.
We believe that three major tailwinds work in Flex Finance’s favor. First, high inflationary environments mean customers need to control costs. Second, we’ve seen growing acceptance of fintechs as partners, a trend started with the first wave of fintech adoption in Africa, and spearheaded by players such as Interswitch and Flutterwave. More fintechs are seeing an increase in financial transactions on Nigeria’s Central Bank “switch” than traditional banks. Lastly, recent pan-African economic policies are expected to spur cross-border trade. Regulators are pushing for the digitization of cash and new trade agreements, such as AfCFTA, can potentially unlock trillions in value by creating a single trade block, similar to the EU.
The Nigerian market
In 2021, Nigeria had the world’s 6th largest instant payment infrastructure, three spots ahead of the US and one spot behind the UK. According to one study, financial innovation is a significant contributor to the country’s economic growth. By starting in Nigeria, we believe Flex Finance can service a significant beachhead market while building on the continent’s most advanced financial infrastructure rails. Competitors who built rails outside of Nigeria and want to enter the market might have to re-engineer their tech stack, on the other hand.
Getting to know Flex Finance
We met the Flex team through founders in the 500 Global network. Yemi Olulana, the co-founder and CEO, was a two-time technical co-founder who previously went through the Catalyst program that helped accelerate startups such as Chipper Cash. Omoyeni O, co-founder and Head of Growth, has a proven track of scaling revenue at a tech-enabled B2B company. Rounding out the team are Tochukwu Onuchukwu, Head of Product and Design, who was previously at a Nigerian neobank, CTO Anthony Adegbemi, who has strong payment experience, and Abiodun Kolade, Head of Payments.
The future of Flex Finance
After experimenting with different acquisition channels, honing in on a sales playbook for their three core industries in logistics, manufacturing and quick service restaurants, and shortening sales cycles by deploying offline agents to support digital marketing efforts, Flex has grown annualized volume transactions 10x over the past 12 months. The company plans to pursue upmarket customers, and grow active accounts. It will also continue building new features to serve inbound requests from larger customers who have more complex compliance and financial workflows.
An important KPI the team is tracking is the number of digitized approval workflows. As large companies typically have multiple approval workflows depending on the subsidiary or department, this KPI serves as a proxy for how embedded Flex is in an organization. Expansion plans are also in the works, and include Kenya, Ghana, and South Africa.
We look forward to supporting the Flex Finance team!
Legal Disclaimers: 500 Startups programs (including accelerator programs), investor education services, strategic partnership consulting services and events are operated by 500 Startups Incubator, L.L.C. (together with its affiliates, “500 Startups”) and the funds advised by 500 Startups Management Company, L.L.C. do not participate in any revenue generated by these activities. Such programs and services are provided for educational and informational purposes only, and under no circumstances should any content provided as part of any such programs, services or events be construed as investment, legal, tax or accounting advice by 500 startups or any of its affiliates.
The views expressed here are those of the individual 500 Startups personnel or other individuals quoted and are not the views of 500 Startups or its affiliates. Certain information contained herein may have been obtained from third-party sources, including from portfolio companies of funds managed by 500 Startups. While taken from sources believed to be reliable, 500 Startups has not independently verified such information and makes no representations or warranties as to the accuracy of the information in this post or its appropriateness for a given situation. In addition, this content may include third-party advertisements or links; 500 Startups has not reviewed such advertisements and does not endorse any advertising content contained therein.
This content is provided for informational purposes only and should not be relied upon as legal, business, investment, tax or accounting advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only. They do not constitute an investment recommendation, offer to sell or solicit to purchase any investment securities, or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors and may not be relied upon when deciding to invest in any fund managed by 500 Startups. (An offering to invest in an 500 Startups fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by 500 Startups. There can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results.
Charts and graphs provided herein are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Unless otherwise stated, figures are based on internal estimates and have not been independently verified. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. All logos and trademarks of third parties referenced herein are the logos and trademarks of their respective owners and any inclusion of such trademarks or logos does not imply or constitute any approval, endorsement or sponsorship of 500 Startups by such owners.