Transforming Trade Finance for African Small and Medium Enterprises: Liquify Raises $1.5 Million
Liquify, a Ghanaian fintech startup specializing in AI-powered invoice financing, has successfully raised $1.5 million in an oversubscribed seed equity round. The funding will be used to expand the company's team in Ghana, focusing on product, technology, and customer success functions, and to enter new markets across both Anglophone and Francophone Africa, starting with Nigeria.
Founded in 2023 by Nadya Yaremenko and Alberta Asafo-Asamoah, Liquify aims to address the challenges of traditional trade finance in Africa, particularly for small and medium enterprises (SMEs). The company provides African exporters with a digital platform to convert unpaid invoices into immediate working capital through invoice financing.
One of the main challenges Liquify faces is navigating multi-country compliance and regulatory complexity. Expanding across diverse African markets means navigating varying compliance requirements, including onboarding, KYC (Know Your Customer), AML (Anti-Money Laundering), and credit risk regulations that differ significantly from country to country. To address this, Liquify plans to improve its AI-driven risk engines to speed up due diligence and compliance checks.
Another challenge is building trust among SMEs accustomed to informal credit. Many African SMEs traditionally rely on informal credit and cash arrangements, making it difficult to convince them to adopt a formal, digital invoice financing platform. However, Liquify's speed and reliability have helped gain trust, with the platform having not reported any customer churn since its launch, and all onboarded exporters relying on the platform for repeat financing.
Liquify must also persuade investors that SME trade finance in Africa is not only viable but also a scalable and investable asset class. This includes overcoming perceptions of risk and unfamiliarity with the African SME trade finance market. Yaremenko believes that demonstrating to investors that SME trade finance is an investable, scalable asset class is crucial for Liquify's success.
The new funding will also help Liquify address the challenge of liquidity and scaling operational capacity. The platform requires significant liquidity to purchase export invoices at scale and efficient operational teams across product, technology, and customer support to maintain service quality during rapid growth.
Liquify's solution has been especially beneficial for SMEs in the agri-commodity sector, many of whom face payment cycles of 30 to 90 days while waiting for overseas buyers to settle invoices. Since launching its beta in late 2024, Liquify has facilitated over 150 transactions totaling more than $4 million, mainly serving SME exporters in Ghana and Kenya, who trade with buyers in Europe and North America.
The equity round was led by Future Africa and included contributions from Launch Africa, 54 Collective, Digital Africa, Equitable Ventures, and several angel investors. Additionally, Emerald Africa, an impact-focused lender, provided a debt facility to support Liquify's increasing liquidity needs.
Liquify's platform leverages technology to streamline traditionally cumbersome trade finance processes. The company aims to transform trade receivables into a diversified and financeable asset class, potentially helping African SMEs grow their exports sustainably. Ultimately, Liquify's solution could provide investors with exposure to short-term, low-correlation instruments that are insulated from broader market volatility.
In summary, Liquify's expansion across Africa hinges on overcoming complex regulatory environments, earning SME trust, and positioning SME trade finance as an attractive asset class for investors. Leveraging AI technology for speed and risk management, backed by strategic funding and market-specific approaches, Liquify aims to bridge Africa’s $120 billion trade finance gap by transforming slow, informal trade finance processes into fast, scalable digital solutions.
- The financing raised by Liquify, a Ghanaian fintech startup, will be utilized to grow the company's team in Ghana and expand into new markets, particularly in Nigeria. This expansion will focus on product, technology, and customer success functions.
- Liquify plans to address the challenge of navigating multi-country compliance and regulatory complexity by improving its AI-driven risk engines to speed up due diligence and compliance checks.
- In order to position SME trade finance as an attractive asset class for investors, Liquify aims to demonstrate its scalability and potential for low-correlation, short-term investments, potentially providing investors with exposure to insulated trade finance solutions.
