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Africa Roundup: Paga goes global and 4 startups raise $99M in VC

Africa Roundup: Paga goes global and 4 startups raise M in VC


Nigerian digital payments startup Paga is gearing up for international expansion with a $10 million round led by the Global Innovation Fund.

The company is exploring the release of its payments product in Ethiopia, Mexico, and the Philippines‚ÄĒCEO Tayo Oviosu¬†told TechCrunch.

Paga looks to go head to head with regional and global payment players, such as PayPal,  Alipay, and Safaricom according to Oviosu.

‚ÄúWe are not only in a position to compete with them, we‚Äôre going beyond them,‚ÄĚ he¬† said of Kenya‚Äôs¬†<a href=”https://crunchbase.com/organization/m-pesa” data-saferedirecturl=”https://www.google.com/url?q=https://crunchbase.com/organization/m-pesa&source=gmail&ust=1538690131434000&usg=AFQjCNFh9TKfy2mvIHjw_XVc1R63-ggIJg”>M-Pesa¬†¬†mobile money product. ‚ÄúOur goal is to build a global payment ecosystem across many emerging markets.‚ÄĚ

Launched in 2012, Paga has created a multi-channel network and platform to transfer money, pay-bills, and buy things digitally¬†9 million customers in Nigeria‚ÄĒincluding 6000 businesses.

Since inception, the startup has processed 57 million transactions worth $3.6 billion, according to Oviosu. He joined Cellulant CEO Ken Njoroge and Helios Investment Partners’ Fope Adelowo at Disrupt San Francisco to discuss fintech and Africa’s tech ecosystem.

South African fintech startup Jumo raised a $52 million round (led by Goldman Sachs) to bring its fintech services to Asia.¬†The company‚ÄĒthat offers loans to the unbanked in Africa‚ÄĒhas opened an office in Singapore to lead the way.

The new round takes Jumo to $90 million raised from investors and also saw participation from existing backers that include¬†Proparco ‚ÄĒ which is attached to the¬†French Development Agency¬†‚ÄĒ Finnfund, Vostok Emerging Finance, Gemcorp Capital, and LeapFrog Investments.

Launched in 2014, Jumo specializes in social impact financial products. That means loans and saving options for those who sit outside of the existing banking system, and particularly small businesses.

To date, it claims to have helped nine million consumers across its six markets in Africa and originated over $700 million in loans. The company, which has some 350 staff across 10 offices in Africa, Europe and Asia, was part of Google’s Launchpad accelerator last year. Jumo is led by CEO Andrew Watkins-Ball, who has close to two decades in finance and investing.

Lagos based Paystack raised an $8 million Series A round led by Stripe.

In Nigeria the company’s payment API integrates with tens of thousands of businesses, and in two years it has grown to process 15 percent of all online payments.

In 2016, Paystack became the first startup from Nigeria to enter Y Combinator, and the incubator is doing some follow-on investing in this round.

Other strategic investors in this Series A include Visa and the Chinese online giant Tencent, parent of WeChat and a plethora of other services. Tencent also invested in Paystack’s previous round: the startup has raised $10 million to date.

Paystack integrates a wide range of payment options (wire transfers, cards, and mobile) that Nigerians (and soon, those in other countries in Africa) use both to accept and make payments. There’s more about the company’s platform and strategy in this TechCrunch feature.

South African startup Yoco raised $16 million in a new round of funding to expand its payment management and audit services for small and medium sized businesses as it angles to become one of Africa’s billion dollar businesses.

To get there the company that ‚Äúbuilds tools and services to help SMEs get paid and manage their business‚ÄĚ plans to tap $20 billion in commercial activity that the company‚Äôs co-founder and chief executive, Katlego¬†Maphai estimates is waiting to move from cash payments to digital offerings.

Yoco offers a point of sale card reader that links to its proprietary payment and performance software at an entry cost of just over $100.

With this kit, cash based businesses can start accepting cards and tracking metrics such as top selling products, peak sales periods, and inventory flows.

Yoco¬†has positioned itself as a missing link to ‚Äúsolving an access problem‚ÄĚ for SMEs. Though South Africa has POS and business enterprise providers ‚ÄĒ and relatively high card (75 percent) and mobile penetration (68 percent) ‚ÄĒ the company estimates only 7 percent of South African businesses accept cards.

Yoco says it is already processing $280 million in annualized payment volume for just under 30,000 businesses.

The startup generates revenue through margins on hardware and software sales and fees of 2.95 percent per transaction on its POS devices.

Yoco will use the $16 million round on product and platform development, growing its distribution channels, and acquiring new talent.

Emerging markets credit startup Mines.io closed a $13 million Series A round led by The Rise Fund, and looks to expand in South America and Asia.

Mines provides business to consumer (B2C) ‚Äúcredit-as-a-service‚ÄĚ products to large firms.

‚ÄúWe‚Äôre a technology company that facilitates local institutions ‚ÄĒ banks, mobile operators, retailers ‚ÄĒ to offer credit to their customers,‚ÄĚ Mines CEO and co-founder Ekechi Nwokah¬†told TechCrunch.

Most of Mines’ partnerships entail white-label lending products offered on mobile phones, including non-smart USSD devices.

With offices in San Mateo and Lagos, Mines uses big-data (extracted primarily from mobile users) and proprietary risk algorithms ‚Äúto enable lending decisions,‚ÄĚ Nwokah explained.

Mines started operations in Nigeria and counts payment processor¬†Interswitch¬†and mobile operator Airtel as current partners. In addition to talent acquisition, the startup plans to use the Series A to expand its credit-as-a-service products into new markets in South America and Southeast Asia ‚Äúin the next few months,‚ÄĚ according to its CEO.

Nwokah wouldn‚Äôt name specific countries for the startup‚Äôs pending South America and Southeast Asia expansion, but believes ‚Äúthis technology is scalable across geographies.‚ÄĚ

As part of the Series A, Yemi Lalude from TPG Growth (founder of The Rise Fund) will join Mines’ board of directors.

 

Digital infrastructure company Liquid Telecom is betting big on African startups by rolling out multiple sponsorships and free internet across key access points to the continent’s tech entrepreneurs.

The Econet Wireless subsidiary is also partnering with local and global players like Afrilabs and Microsoft­­ to create a cross-border commercial network for the continent’s startup community.

‚ÄúWe believe startups will be key employers in Africa‚Äôs future economy. They‚Äôre also our future customers,‚Ä̬†Liquid Telecom‚Äôs¬†¬†Head of Innovation Partnerships Oswald Jumira¬†told TechCrunch.

With 13 offices on the continent, Liquid Telecom’s core business is building the infrastructure for all things digital in Africa.

The company provides voice, high-speed internet, and IP services at the carrier, enterprise, and retail level across Eastern, Central, and Southern Africa.  It operates data centers in Nairobi and Johannesburg with 6,800 square meters of rack space.

Liquid Telecom has built a 50,000 kilometer fiber network, from Cape Town to Nairobi and this year switched on the Cape to Cairo initiative‚ÄĒa land based fiber link from South Africa to Egypt.

Though startups don’t provide an immediate revenue windfall, the company is betting they will as future enterprise clients.

‚ÄúStep one‚Ķin supporting startups has been‚Ķ.supporting co-working spaces and events with sponsorships and free internet,‚ÄĚ Liquid Telecom CTO Ben Roberts told TechCrunch. ‚ÄúStep two is helping startups to adopt‚Ķbusiness services.‚ÄĚ

Liquid Telecom provides free internet to 30 hubs in seven countries and is active sponsoring startup related events.

On the infrastructure side, it’s developing commercial services for startups to plug into.

‚ÄúAt the early stage and middle stage, we‚Äôre offering startups connectivity, skills development, and access to capital through the hubs,‚ÄĚ said Liquid Telecom‚Äôs Oswald Jumira.

‚ÄúWhen they reach the more mature level, we‚Äôre focused on how we can scale them up‚Ķand be a go to market partner for them. To do that they‚Äôll need to leverage‚Ķcloud services.‚ÄĚ

Microsoft and Liquid Telecom¬†announced a partnership¬†in 2017 to offer cloud services such as Microsoft‚Äôs Azure, Dynamics 365, and Office 365 to select startups through free credits‚ÄĒand connected to comp packages of Liquid Telecom product offerings.

On the venture side, Liquid Telecom doesn’t have a fund but that could be in the cards.

‚ÄúWe haven‚Äôt yet started investing in startups, but I‚Äôd like to see that we do,‚ÄĚ said chief technology officer Ben Roberts. ‚ÄúThat can be the next move onwards‚Ķ from having successful business partnerships.‚ÄĚ

And finally, tickets are now available here for Startup Battlefield Africa  in Lagos this December. The first two speakers were also announced, TLcom Capital senior partner and former minister of communication technology for Nigeria Omobola Johnson and Singularity Investment’s Lexi Novitske will discuss keys to investing across Africa’s startup landscape.

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Source: techCrunch
Africa Roundup: Paga goes global and 4 startups raise M in VC

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