Futuregrowth Asset Management has announced a R150m investment into Sourcefin, a South African fintech and alternative funding provider dedicated to providing access to finance and specialist supply chain support for small and medium-sized enterprises (SMMEs).  

This investment, made through Futuregrowth's High Growth Developmental Equity Fund (HGDEF), further cements the firm’s strategy in supporting high-growth businesses, including the likes of hearX, Yoco, Pineapple, Retail Capital, Ozow and Cash Connect. 

Founded in 2020 and a disruptor in the SMME lending space, Sourcefin is an enabler of the forgotten SMME and addresses the critical R300bn gap in SMME financing, empowering businesses to overcome working capital challenges and successfully fulfil public and private sector purchase orders (binding agreements on which the SMME is obliged to deliver). 

Sourcefin is set to deploy more than R1bn in funding for the financial year, ending February 2025, through its innovative platform which integrates financing, supply chain management, and end-to-end project support.  

“The SMME sector is vital for South Africa's economic growth, yet traditional financing solutions often fail to meet their unique needs, particularly in government-issued orders,” said Amrish Narrandes, Head of Private Equity & Venture Capital at Futuregrowth.  

“Sourcefin’s technology-first approach, coupled with their expertise in procurement and project management, has created a truly transformative solution. Their proven ability to support tender fulfilment while maintaining strong financial performance made this a compelling investment opportunity,” he added. 

Sourcefin’s platform offers more than just financing. It provides clients access to a network of over 2,000 pre-vetted local and international suppliers and ensures operational efficiency and risk management through advanced technology and project oversight. In opposition to traditional models, Sourcefin’s funding approach is opportunity-centric, providing a lifeline to SMMEs where more traditional funders may have declined applications for funding based on history, or a lack thereof.  

A crucial contributor to socioeconomic development and improved service delivery, the SMME sector enables previously disadvantaged and minority groups to enter the economy and accounts for over 30% of South Africa’s GDP.  

With more than 90% of Sourcefin’s client base falling within the minority demographic in the country - including black female-owned and youth-owned businesses, as well as rural-based entrepreneurs -  Sourcefin’s business offering extends beyond practical financial lending and empowers a significant portion of economic and societal development in South Africa. With each order successfully delivered, the quality of life for communities across the country is enhanced.  

“There is no doubt about the massive impact that well-supported SMMEs can have on our country,” said Joshua Kadish, Co-Founder, Director and CEO of Sourcefin. 

“With the support from Futuregrowth, Sourcefin’s ability to scale investment into the SMME sector significantly increases, and it is our commitment that all R150m will be deployed as a reinvestment into the backbone of our economy.”  

In addition, the strategic partnership with Futuregrowth accelerates Sourcefin’s ability to provide innovative financing solutions, scale its operations, enhance its technology platform, and expand its funding deployment nationwide.  

“Our investment into Sourcefin aligns perfectly with HGDEF’s mandate to back innovative businesses that drive real economic impact,” Narrandes added.

“Futuregrowth’s beginnings as the first socially oriented fund to be launched in South Africa align perfectly with a shared goal of driving real business equity and impact within the country,” he said.