Lightrock continues developing market support with 4G Capital Series C

Lightrock led a $18.5 million Series C funding round for Kenya-based neobank fintech 4G Capital, continuing a busy 2022 investing in developing markets. Lightrock has supported M-Kopa, Indian neobanking platform Niyo and healthtech start-up MediBuddy.

Neobanks like 4G Capital operate exclusively online and are direct to consumer

4G Capital has provided over $230 million in loan support to almost two million small businesses since its 2013 launch. The company currently has a client book of almost 250 000, with a majority being women-owned SMEs operating in rural areas.

“We are delighted to partner with Lightrock to further our financial inclusion mission,” said Wayne Hennessy-Barrett, CEO and Founder of 4G Capital.

“Lightrock and 4G Capital share a complete alignment of purpose and mission. They bring unrivalled experience of Africa and emerging markets. This capital will have a transformative effect in enabling us to scale the best products and services to the world’s most important sector.”

This funding will enable the company to scale its last-mile finance and enterprise training solutions to micro enterprises in Kenya and Uganda, expanding its use of digital channels and data science to complement its hybrid ‘touch-tech’ approach.

The investment will also allow them to expand their Kuza retail finance service to help store-owners, FMCGs and distributors boost their sales.

Kuza is a pure fintech plug-and-play service, allowing distributors to stock entrepreneurs using 4G Capital’s credit, rather than traditional cash on delivery. Partnerships with P&G, Diageo and other brands adopting the service have proven highly successful.

“Often used to justify the backing of many African companies, ‘Financial inclusion’ has not always translated into positive outcomes for customers,” said Shakir Merali, Partner at Lightrock

“What is needed on the continent is investment capital to back companies with the mission of financial empowerment. 4G Capital provides liquidity to the vast market of economically generative businesses – the mobile phone repairs, hairdressers and food sellers – that dot the landscape of Africa.”

4G Capital’s capital-efficient model has generated returns for $9 million raised from 2016-2020 and beaten the average microfinance industry lending to capital ratio of 3.45 by loaning 16 times its capital raised.

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