The Nairobi fintech is lending from its own balance sheet to build something else entirely. Founder and CEO Elana Laichena walked us through the round, the product, and a go-to-market that runs on the deals venture capitalists turn down.
Before Elana Laichena founded Flowt, she spent years running a business that couldn't get a loan it obviously deserved.
Acacia Innovations converted sugarcane waste into clean cooking briquettes and sold them to Kenyan schools. Schools pay on 120-day terms. The company had gone through that cycle four times without a single default, and had the records to prove it.
"To me it was a very straightforward ask," Laichena says. "We could always say: this customer pays after 120 days, but they always pay. If we could give our bank visibility into that, they would know it's a pretty low-risk thing to finance. But that's not really how banks work."
So she financed working capital the expensive way — with equity. Two local institutional investors came in, and part of that money went to funding orders. "That's a very expensive way to finance working capital, when you're selling your company just so you can fulfil orders."
The breakthrough, when it came, was not a credit decision. One of her equity investors introduced her to their own bank and put up a corporate guarantee. That unlocked an overdraft facility of about a million shillings — slightly under $10,000. A rounding error in most markets, secured only because someone else pledged their balance sheet.
That experience became an inspiration for Flowt, which announced a $550,000 pre-seed round in August from Delta40 Fund I, Impacc and the Argidius Foundation, and has since issued its first loan.
We spoke with Laichena about the round, the thesis behind it, and how a two-sided lending platform gets off the ground with no borrowers and no lenders.
The bet: it was never about the money
Laichena's founding hypothesis only hardened once she moved to the other side of the table — first at Open Capital Advisors, then as Managing Director for Kenya at the venture studio Delta40.
"I realised the working capital problem was pervasive. It wasn't unique to my business, and it wasn't that I was bad at fundraising. It affected all of our portfolio companies, even the ones that had raised millions of dollars in VC. Their growth was really held up by working capital. We'd have lunches with portfolio companies and ask what they needed to grow, and working capital was almost always on the agenda."
Africa's SME financing gap is usually quoted at $330 billion, and usually framed as a shortage of capital. Laichena thinks that framing is wrong, and she has a data point that is hard to argue with.
"There are all these huge capital commitments from DFIs, either directly or to finance banks, and then investors aren't meeting their deployment targets. If you ask them why not, they say it's for lack of qualified pipeline."
At Delta40, she ran a survey of around thirty lenders focused on startups and small businesses. The top reason they gave for not writing more loans was exactly that: no qualified pipeline. Money committed, mandate in hand, nothing to deploy into.
The mechanics behind that are brutal. Traditional due diligence runs six to nine months, which makes any ticket under $200,000 uneconomical to underwrite. The businesses are there. The capital is there. Neither can see the other clearly enough to transact.
What a bank can't see
Flowt's product starts from a specific observation about why bank data is insufficient.
"A bank typically only looks at its own transaction history with that customer," Laichena says. "But I've yet to meet a business that has only one bank account."
A Kenyan SME might run several bank accounts, take payments through M-Pesa, hold balances in more than one currency, and carry informal loans that never show up on any statement. The bank sees a slice and prices for the rest.
Flowt ingests all of it — multi-account and multi-currency bank statements as PDFs, mobile money records, and direct integrations with the accounting systems that are actually used in the market: QuickBooks, Odoo, Zoho, Xero. The engine, built by CTO Handel Dan Owour — previously responsible for data infrastructure at Twiga Foods and SunCulture — reconciles those sources into a single cash-flow picture.
The reconciliation turns out to be the hard part, and not only for Flowt. "Even when businesses have accounting software, reconciliation is a big challenge for them. The existing accounting software available isn't really using AI capabilities to their full advantage, and the tools that do are incredibly expensive." That gap is why an AI-native accounting product for emerging-market SMEs, producing IFRS-aligned statements for people who are not accountants, sits on the roadmap for the end of 2026.
Gut feel is what's left when there's no data
The second half of the thesis follows directly from the first. When lenders can't see the numbers, they fall back on the only signal available to them: the founder.
"Because they don't have a lot of data on these businesses, they often end up making lending decisions on gut feel," Laichena says of the private credit providers and impact investors who take six months on a deal. "They'll take months to get to know the entrepreneur and develop a sense that this is a good person, which may or may not be true. There are a lot of very sweet talkers who end up not being good payers."
The six-month timeline and the character assessment are the same phenomenon. Diligence stretches because there's nothing verifiable to shorten it, and personality expands to fill the space where cash flow data should be.
Flowt's position: "We're not making a decision at all on whether or not we like the entrepreneur. There have been a few cases where we really like the entrepreneur, but the data just doesn't add up."
That's not a purely mechanical model. The leadership team is still assessed, through a standardised review of the founders' public web and LinkedIn presence, alongside automated reference checks with the business's suppliers, partners and investors. What changes is that these become quantified inputs in a scoring framework, rather than impressions accumulated over six months of meetings.
For GreenBay — a Kenyan business refurbishing and reselling appliances and solar home systems, and Flowt's first borrower — that compressed the process from months to days.
The go-to-market: own one side, then open the other
Here's the part most coverage of this round missed, and the part worth studying if you build two-sided products.
Flowt is, eventually, a marketplace: businesses on one side, lenders on the other. Marketplaces at pre-seed die of the cold start. Flowt's answer was to refuse to be a marketplace yet.
"We started lending on our own balance sheet to avoid that marketplace dynamic," Laichena says. "When we say we have capital, it's easier to get businesses on board, and for them to actually try out our tech and give us their financial data."
The lending is a wedge, not the destination. "We're doing lending now as a pilot, which lets us get real data on these companies and refine our software. But we don't see ourselves becoming a fund." The endgame is to unlock other institutions' balance sheets — commercial banks, private debt funds — while Flowt sits in the middle as the software layer. It already lends in partnership with Choice Bank, a microfinance institution.
The sequencing matters: get businesses on, learn their data, train the model, and the software stops being a generic loan management system and becomes a proprietary asset. Cold start solved by buying the first side with capital rather than promises.
On acquisition, the mechanism is sharper still. Flowt's borrowers don't search for "working capital financing." They come almost entirely through referral partnerships with equity investors, incubators and accelerators — and, most interestingly, through the deals venture capital rejects.
"As a VC you sometimes have to say no to businesses. It's not that the business isn't viable, it's just that VC is a very unique thing that needs a business to be hyper-scalable."
Delta40 has been routing exactly those companies to Flowt: profitable, real, growing, and completely wrong for a venture fund — but with genuine working capital needs. Flowt now wants to replicate that arrangement with other VCs. It is a channel built out of someone else's waste stream, and it is close to free.
A free Financial Health Check tool, which plugs into a business's accounting software and returns a readiness score, sits at the top of the same funnel — giving the SME something useful while generating precisely the data Flowt would need to underwrite it.
On the lender side, the pitch changed after contact with the market. Flowt started by selling financial due diligence. That's not the main thing that buyers wanted.
"What they really need is the ability to monitor their portfolio after they disburse a loan — to know whether borrowers are on track to repay, apart from self-reported financials."
Post-disbursement portfolio monitoring, not pre-deal analysis. The initial due diligence is a one-off; the monitoring is a subscription. It's a better business, and Flowt only found it by shipping the first version and listening.
What's next
The near-term plan is small and deliberately so: deploy at least ten loans with the capital on hand, learn from that cohort, and refine the product. A second close is in progress, along with debt and repayable grants. The target is a $1 million loan book by the end of 2026, against a pre-qualified pipeline of fifteen-plus borrowers representing $1–2 million in demand.
Laichena is clear-eyed about the crowd she's joining. 4G Capital, Pezesha and Numida have all been doing alternative-data lending in this market for years, and she hears the objection constantly.
"A lot of people say everyone's doing AI-based lending. But there's still a massive problem out there. Capital isn't moving, and lenders aren't getting the non-performing loan rates they want. It's still a big opportunity. We're not just trying to do AI credit scoring — we're trying to provide the financial intelligence layer that helps lenders and businesses understand each other."
Three things growth teams can take from this
Buy the hard side of your marketplace. Flowt didn't try to recruit lenders and borrowers at once. It put its own capital on the table so borrowers had a reason to hand over their data, and deferred the second side until the data itself was the product.
Someone else's rejected leads are a channel. VC funds say no to viable businesses every week for reasons that have nothing to do with quality. Flowt turned that rejection pile into a qualified pipeline. Ask who is disqualifying prospects that would qualify for you.
Your first ICP guess may be right about the buyer and wrong about the job. Flowt correctly identified lenders as customers, then discovered they wanted portfolio monitoring more than due diligence — a recurring need instead of a one-off. That only surfaced through conversations after MVP launch.