Etienne Nel, CEO of ZAR X.
Targeted at both investees and investors, Uprise.Africa facilitates the investment process for small to medium enterprises and entrepreneurs, through crowdfunding.
Its online equity crowdfunding model enables multiple investors to support entrepreneurs through buying equity in their businesses.
The new partnership deal will see local start-ups and small companies, which have successfully raised capital via Uprise.Africa, listed on ZAR X, which is a competitor to the Johannesburg Stock Exchange (JSE).
Launched in 2017, ZAR X was the first alternative stock exchange to the JSE in SA, since the Union Exchange was closed by government in 1958.
Targeted at companies that do not want to spend the time and money to meet the listing requirements on the JSE, ZAR X provides companies with a viable alternative for raising capital.
The company says its listing regime relies on the Companies Act, among other relevant pieces of legislation, to ensure that issuers operate legitimately and ethically.
“We are simplifying venture capital through this mutually beneficial partnership for both entrepreneurs and investors. It means when you have a business idea, you can leverage the Uprise.Africa platform to potentially raise capital, and can ultimately list on a licensed stock exchange, making your shares tradeable,” explains Tabassum Qadir, CEO of Uprise. Africa.
“We aim to disrupt the country’s traditional funding landscape by providing an alternative method for small businesses to raise capital. This is innovation for us, and we are excited to partner with ZAR X.”
Uprise.Africa recently made history, raising over R32 million in only six days for SA-based regulatory technology start-up, Intergreatme. Through extensive vetting, legal and compliance checks, Uprise.Africa creates a credible and transparent platform.
The equity funding platform says it allows investors to bring capital into South African businesses in exchange for equity shares.
In order to present a unique offering to business owners and investors alike, Uprise.Africa also assists entrepreneurs to craft their pitches.
“ZAR X is delighted to partner with Uprise.Africa to bring a new product to the capital markets space and give crowdfunding investors transact-ability in their investments, which ultimately drives financial inclusion and job creation,” notes Etienne Nel, CEO of ZAR X.
“Listing on ZAR X means that no one in the value chain, whether an investor, a broker, or an issuer, needs to hold large sums of money for days, waiting for a transaction to be settled as trades are cleared and settled in around 10 seconds. This makes small transactions profitable for brokers and companies and, in turn, this enables people to buy and sell shares for as little as R1 000.”
The World Bank estimates that by 2025, the overall market potential for crowdfunding in sub-Saharan Africa will be $2.5 billion. Currently, in SA, entrepreneurs have to look to traditional funding models like bank loans, venture capital, private equity and government grants to access the funding they need for their businesses.
Uprise Africa says it is in discussion with the Youth Employment Services skills development initiative to recruit 500 youth and train them as financial stockbrokers under its licence.
The company says it is also in the process of offering space to businesses that will list on its platform and subsequently on ZAR X.
“Crowdfunding democratises start-up financing by enabling entrepreneurs to raise capital, which allows more people to own equity and gives a broader spectrum of South Africans the opportunity to invest in SMEs. To develop a sustainable solution to the growth of the SME sector, it is important to create alternative systems for entrepreneurs to access funding,” concludes Qadir.