Kenyan financial intelligence platform Flowt raises unknown Pre-seed funding round
An unknown pre-seed investment round has been completed by Kenyan startup Flowt, an AI-driven financial intelligence platform that makes climate-smart firms in Africa investable.
Elana Laichena founded the Nairobi-based company Flowt, which utilizes AI to transform disorganized financial records into data suitable for lenders, providing working cash to climate-smart enterprises in Africa. GreenBay, a Kenyan appliance refurbisher whose expansion was limited by inventory it could not afford to store, is the recipient of its first facility.
The funding round, which was obtained from the Argidius Foundation, Impacc, and Delta40 Fund I, will help Flowt expand as it distributes finance throughout Kenya and develops the financial intelligence layer that makes companies understandable to lenders.
“Funders in Africa have three bad options when they look at a small business. Ask for collateral it does not have. Spend six months on due diligence, which makes a small loan uneconomical. Or assume the worst, price for it, and charge an interest rate the business cannot afford. All three are responses to the same problem, which is that nobody can see trustworthy numbers,” said Laichena. “Flowt lends against verified transaction history, which makes working capital both fast and affordable.”
By locating, testing, refurbishing, and reselling used and second-life equipment to homes and small companies, GreenBay, a rapidly expanding circular commerce company for home, solar, and other appliances, makes high-quality, reasonably priced goods more accessible. Its growth ceiling is determined by working capital rather than demand because revenues are closely correlated with the amount of inventory it can store. This limitation is as old as trade. More inventory translates into more sales. Less inventory equates to fewer.
That reasoning would be immediately recognized by a bank, yet they would still reject the loan. In its second year in business, GreenBay sells to homes and small and medium-sized enterprises (SMEs) rather than large clients whose credit a lender could rely on. When a bank is unable to do so, it checks those boxes.
Flowt read it in a different way. After integrating with GreenBay’s Odoo system to view the operational picture, it independently confirmed the information using machine learning and artificial intelligence analysis of the company’s bank accounts. Based on data the company already produces in the regular course of business, position, cash flow, and repayment capacity were evaluated in days rather than months.
Many businesses have added the term “AI” to their names.
The work that makes the loan possible at Flowt is done by AI. Instead of making predictions, the software collects transaction data from a company’s accounting system and bank records, compares them, and creates a picture that is accurate enough to lend against in an afternoon rather than six months. Due to the high evaluation costs of the smaller energy transactions, climate money in Africa has concentrated in larger ones. Accurate, affordable reading lowers the floor.
After receiving the loan, GreenBay began making payments using their Flowt wallet and utilized it to purchase and sell more products. GreenBay now maintains a separate account for purchases and collections, keeping this money apart from running costs thanks to the Flowt wallet architecture. This arrangement lowers risk for Flowt and provides lenders with a more accurate view of the company.
