The announcement follows Franc’s recent seed extension raise of R8-million, which included investment from pan-Africa focused venture capital firm 4DX Ventures. The capital injection will in part fund their B2B initiative aimed at businesses who want to entrench customer loyalty and their value proposition with a ‘plug and play’ investment and savings offering.

Franc was launched in 2017 by varsity mates, actuary Sebastian Patel and engineer Thomas Brennan, who were frustrated by the complexity and high barrier to entry of existing investment offerings, and concerned by the poor rate of investment among South Africans (less than 8%) outside of retirement products.

Franc is unique in that it doesn’t impose investment minimums on its users. Users can invest as much as they want, when they want, conveniently through their mobile application.

“With Franc, consumers can start investing within minutes of downloading the app, and can, if needed, extract their funds within a few days of requesting a withdrawal through the app,” said Brennan, who is also Franc’s CEO.

Despite the headwinds of COVID 19, many South Africans, from students to doctors, have taken to the app as a first foray into investments and savings for a rainy day. In 2021, customer growth was over 400%.

Introducing Franc Business
Now the two founders and their growing team are launching Franc Business which will enable companies to offer quality investment products to their own customers using Franc’s technology and license.

“The advantage of Franc Business is its simplicity and low cost. As a B2B play, we provide a single application programming interface (API), which gives us the ability to integrate with client platforms quickly and easily.

Franc Business clients can help their customers to start saving or investing immediately, boosting loyalty and value for the business, without the hassle of regulatory red tape and lengthy technical development,” said Patel, who is also Franc’s COO.

Patel believes any platform that has a store of value or partners that want to enhance their existing product offering like short term or life insurers, neobanks, HR/payroll providers, buy now pay later and early wage access providers could benefit from the Franc Business solution.

“Partners could also divert a portion of spend into a customer loyalty wallet that will earn more interest than most bank savings accounts,” he added.

Commenting on his company’s decision to invest in Franc, Managing Partner, 4DX Ventures, Peter Orth said: “We’re passionate about expanding the opportunity for everyone to save and invest, as it’s a critical component of being able to build wealth over time. We think Franc has an excellent vision for how they will accomplish this in South Africa, and we’re excited to support them.”

Simplicity enhanced
Franc’s simplicity is enhanced by limiting investment choices to just two funds - the Allan Gray Money Market and the Satrix Top 40 ETF - both proven and reliable in the market. Allan Gray Money Market Fund provided a return of around 4.5% over the last 12 months. The Satrix 40 ETF has returned 12% a year on average over the past three years and 10% on average per year over the past five years.

“Given consumer awareness of the need to save and the exponential growth in the digital adoption of financial services products, our view is that the time is most opportune for the Franc Business savings and investment solution as a value add in the market,” Patel concluded.