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South African startup, FlexClub, closed $1.2 million seed round funds by CRE Venture Capital

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Flexclub

FlexClub is a South African startup which matches investors and car drivers for ride-hailing services. It recently closed a seed funding from CRE Venture Capital worth $1.2 million. It will use the funds to expand beyond the continent through a partnership with Uber Mexico.

This move follows the tech-transit space of Africa producing unique mobility solutions which are chiefly shaped around local needs. FlexClub is creating new classes of the asset in emerging markets and describes itself as a ‘gig economy investment platform’. Tinashe Ruzane, the chief executive and co-founder, explained that for now, that asset class is limited to ride-hail automotive. Investors can go on the site and buy a car which is ultimately managed and serviced by FlexClub itself. Then, it connects that particular car with an Uber driver. The driver can use his earnings for paying a rental charge per week. This fee is used to generate monthly interest income for the investor with fixed rates. The driver also gets the choice to buy that car after a year at a depreciated price.

Flexclub

The FlexClub platform handles investment, income from the rental as well as disbursement of the funds across all parties which use the platform. It also manages maintenance, insurance, and repairs of the cars. Ruzane describes this model to be able to finance many asset classes in emerging markets. Lending options are fewer for people who may not have credit histories. FlexClub generates revenues by charging a certain percentage of the investors’ rental income for club membership. Savannah Fund, based in Nairobi, and Michael Jordaan, South African angel investor, joined CRE, the lead investor, in the $1.2 million round. CRE partner, Pardon Makumbe, highlighted that FlexClub is solving the supply-demand problem in South Africa by standardizing the exchange between asset investors and their users.

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