South African startup ApexPeak, a capital provider for small and medium enterprises (SMEs) and those transacting on electronic invoicing networks, has bought Dubai-based Cashnomix, a cloud-based capital platform that has developed a proprietary credit-scoring algorithm.

The startup is a graduate of the first ‘88mph’ accelerator programme in Cape Town, and is now expanding after a successful 18 months that saw it secure $1.84m of follow-on funding.

Both enterprises ease cash flow problems by offering early payments on their invoices, but Cashnomix recently completed a prototype credit-scoring algorithm for invoices and has a UAE deal book worth $1.2m.

“The result is faster underwriting,” said Gakim Solomons, co-founder of ApexPeak, who noted the algorithm has far reaching implications. “Today, we can provide SMEs with an answer in five days. Tomorrow, we will be able to approve transactions in a fraction of the time.”

Sujith Kurup, founder and CEO of Cashnomix, said: “Everybody thinks the Middle East is flush with cash. While it is true to some degree, that cash does not readily reach small businesses, for which short-term finance is difficult and the cost of borrowing from traditional lenders is between 18 and 30% a year.”

He added: “The algorithm we have built collects signals from a large variety of sources to determine a score and a confidence index for each invoice.”