Fintech Middle East & Africa Weekend read

The Top Recent African Fintech Funding Rounds including Flutterwave, Adumo and Kuda

The fintech ecosystem in Africa has always been one to watch, with the vast number of countries, cultures and emerging markets creating a space in which fitnech can thrive. With the Covid-19 pandemic accelerating digital transformation globally, Africa is no exception to this, and a number of fintech start-ups are taking advantage of the opportunities presented within the market. 

As the sector grows, so do the fintechs themselves, utilising investors to achieve their goals. Here are some of the top funding rounds that have come out of African fintech recently

Flutterwave

African payments company Flutterwave recently closed a $170million funding round, valuing the company to over $1billion and launching it into unicorn status. The round was led by US-based investment firms Avenir Growth Capital and Tiger Global. Other investors, both new and existing, include DST Global, Worldpay FIS and 9yards Capital. 

The company was launched in 2016 as a Nigerian and US-based payments company. With offices in Lagos and San Francisco, Flutterwave helps businesses build customisable payments applications, having processed over 140 million transactions worth more than $9billion.

Flutterwave plans to use the funds to speed up customer acquisition in its present markets as well as improving its existing product offerings. The company has also set its sights on becoming a global payments company and has reportedly been ‘eyeing a US listing’ in response to the latest funding round. 

“We may consider the possibility of listing in New York or a possible dual listing in New York and Nigeria,” Flutterwave’s CEO and co-founder Olugbenga Agboola told Reuters

“Flutterwave is at the forefront of innovation in payments technology,” said Jamie Reynolds, a partner at Avenir Growth Capital. “We are excited to support the team as they build the last available payments infrastructure frontier in the world – connecting merchants and consumers intra-Africa and globally.”

Adumo

Adumo, based in Johannesburg, has received $15million in funding from IFC and IFC Financial Institutions. The funding will aid in its expansion for digital payment services for underserved African SMEs, making payment systems more affordable and accessible to those who rely on cash transactions.

Paul Kent, CEO of Adumo, said:  “The pandemic and associated impact on consumers and businesses are transforming the face of the payments industry with interest in cashless payment services at an all-time high. The funds we have raised from our new equity partners will help us roll out new payment innovations and purpose-based lending services to support consumers and retailers as they navigate an uncertain 2021.” 

“Through this investment in Adumo, we will be helping small businesses tap into the digital economy, which is more important now than ever before. Digital payments are often the first step for a small business to build a credit history, which opens the way to access further financial services such as financing to grow the business,” said Sérgio Pimenta, IFC’s Vice President for the Middle East and Africa.

“Supporting small businesses to access finance and financial services affordably and sustainably is a priority for IFC because of their potential to not only grow the economy but also create jobs,.”

Kuda

Kuda Technologies has closed a $25 million Series A funding round led by Valar Ventures. This is the first time that Valar, who has previously invested in fintech start-ups such as N26, Wise and Stash, has backed an African start-up. 

Babs Ogundeyi, CEO and co-founder of Kuda, commented: “We could not be more pleased that Valar Ventures has decided to come on board and join us on this mission. Their insights and experience in helping advise some of the world’s most successful challenger banks will, without doubt, be a critical part of our successes going forward.”

Kuda is considered to be at the forefront of the African challenger bank scene, offering mobile-first banking services in Nigeria. They allow customers to save and spend their money and have recently introduced an overdraft facility. The new funding will be used to expand the companies credit offerings, add in more integrations and expand into more markets. 

Nomanini

South African based start-up Nomanini has raised a new round of funding worth $1.5million. The company was founded in 2010 and has developed a platform that enables merchants and micro-entrepreneurs in emerging markets to distribute digital goods such as airtime and prepaid electricity. They also offer microloans. 

This latest round of funding from new and existing investors will be used to invest in product development, scale its offering and expand its team. This is the second significant funding round the start-up has closed, after raising $4million in 2019 led by Standard Bank and Goodwill Investments, who have both contributed to the latest round. 

Wim van der Beek, the managing partner of Goodwell Investments and board member at Nomanini, said his company had been very impressed with Nomanini’s traction and resilience during the pandemic. 

“We believe in Nomanini’s market approach and the ability of the team to capture the growth opportunities,” he said. “As investors focused on inclusive growth, we are excited to put more money behind this conviction. We are happy to welcome FMO into the circle of investors: their support will help Nomanini grow its circle of partners around Africa even faster.”

ArifPay

ArifPay is Ethiopia’s first mobile point of sale system. The recently launched company has raised $3.5million in funding to launch its operations as it plans its nationwide rollout. The company plans to fully launch in April once it receives its license from the national bank of Ethiopia, reportedly the first license to be granted for a fintech start-up within the country. 

“The company intends to launch MPOS, gateway and related digital financial services in Ethiopia by leveraging the latest MPOS and online payment technology platform in the industry and developing user-oriented products and services that will allow people to use their mobile phone and their payment instruments for conducting financial services including payments,” founder and CEO Habtamu Tadesse told Disrupt Africa.

“Once operational, ArifPay aspires to make a significant contribution to the financial sector by offering digital-based payments services that meet the needs of consumers and merchants towards cash-lite transactions in line with the national agenda of the digital economy. We also believe ArifPay will support the country’s aspiration towards building a digital economy by empowering businesses and entrepreneurs who are looking for digital payment solutions to digitalise their business and services deliveries.”

Stitch

Stitch has raised a seed round of $4million, one of the largest rounds raised by any API fintech start-up so far in Africa. The round was led by Raba and firstminute capital, as well as several other global investors including the founders of Venmo and the founder of Klarna. The funding will be used to expand their internal team and support their expansion, with plans to launch operations in West and East Africa.

Based in South Africa, the Stitch API provides tools to help fintechs build apps that connect to users’ financial accounts, helping to reduce technical and operational effort and help African fintech developers create innovative products. 

The start-up managed to get their investors onboard while still in stealth, with Kiaan Pillay, co-founder, and CEO of Stitch, stating this was due to their vast network in the US. 

“Spending a lot of time in San Francisco when working with Smile has helped us to get in touch with these globally world-class founders and investors. There’s an opportunity for us to provide a new generation of financial services in markets across Africa, and we’re really fortunate to have them back us.” 

He added, “It makes no sense that we’re still building financial services the same way we did 15 years ago. There’s an incredible opportunity to provide a new generation of financial services in South Africa and across other African markets. At Stitch, we enable smart people in the ecosystem to unlock this potential and build amazing products and services, powered by our infrastructure.” 

Author

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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