Seedstars Rwanda competition ended with local startup BenefactorsLTD bagging best startup in the country. BenefactorsLTD is a factoring company that provides tailored working capital solutions to firms. Factoring is a financial service, where future payments from your buyers are sold to a third party, the factor for cash. They are open to working with either pending invoices or purchase orders for delivery. This means that businesses can continue working even if their buyers take a long time to pay; it also allows them to take on more clients at the same time – allowing you peace of mind as you grow your business. TechMoran spoke to Benefactorsltd CEO, Olivia Zank about the company and prospects for the future.
Tell us about yourselves; your team, your educational and professional backgrounds
We’re a team of six people, as well as a group of advisers. My co-founder and I both come from management and government consulting backgrounds, while the team has a variety of backgrounds – 15 years in investment banking, 18 years entrepreneurship in Rwanda and 15 years in marketing and branding
How would you best describe Benefactors LTD briefly, what does it do?
We are a factoring fintech. We provide working capital solutions to SMEs in Rwanda, focusing on cash advances against confirmed invoices
What market gap did you spot that motivated you to start this company?
Access to finance is a huge challenge in Rwanda, but it is especially working capital and liquidity products that are missing. These need to be both flexible and quick since cash flow problems can be urgent. At the moment, SMEs, in particular, go to illegal money lenders who are our main competitors
Who is your target market?
Any company with a confirmed invoice for payment. We are sector agnostic but only work with B2B clients for now.
How does your company make money?
We charge a commission on cash advances
Who would you say is your major competition in this space at the moment?
Illegal money lenders
How do you ensure that the buyer will not default on payment and the third party is left holding an empty ‘package’ so to say? and in the unfortunate case that it happens, how do you compensate for the loss?
It’s a confirmed legally binding invoice that we buy. If they don’t pay it, we do the same that any other company does when an invoice isn’t paid… soft pressure and ultimately legal action. And we’re not left with empty packages if we screen properly,
what about if the firm delivers substandard work or product?
We screen for that.
What is your vision for the company in the next 5 years?
We want to cover all of East Africa by 2025
At the moment, how do you measure your own success? What are your metrics?
We measure success in terms of turnover, timely payment rates, and client retention. We’ve so far had 100% payment rate and >85% client retention
What advice would you give to upcoming entrepreneurs?
Just start, try it out. Don’t get too bogged down with business plans or analysis. You won’t know whether people like your product until you try to sell it – then you get very fast and concise feedback! Then you start analyzing, capturing the feedback you get systematically so that you can know what people like and what they don’t. We ran a lot of interviews and focus groups to understand both what it is people need and what they are doing right now since their current solutions are what you’re competing with.