Finmark Trust estimates that in 2024, three out of every four adults who took loans used the money to pay for essentials. The trend is worse among low-income earners who usually fall into the hands of costly micro-lenders and loan sharks.

TymeBank believes it has found a solution; in partnership with Deel Local Payroll, the bank is introducing Early Wage Access (EWA), a service that allows workers to withdraw part of their salaries before payday. 

Unlike traditional credit, EWA does not saddle employees with interest or repayment obligations. Instead, it lets them access wages they have already earned, reducing their dependence on high-interest loans.

Jarred Deacon, head of Growth at TymeBank ZA, explained the reality employers face. “Corporates spend a lot of their time managing resources, so our teams are inundated with requests from either lending or trying to understand how to manage people’s cash flow. We have many examples where people come through and see how they can access some portion of their money if they have a medical emergency or if they have some type of financial distress. They try their best to really fix that issue.”

EWA has been around for more than a decade. In the United States, over seven million workers used it in 2022, moving about $22 billion in transactions. Major companies such as Walmart and McDonald’s now make it available to staff, and employees increasingly expect the flexibility of drawing wages early.

In South Africa, TymeBank and Paymenow are at the front of this movement, and Deel Local Payroll is providing the cloud technology to make the early wage access process seamless. 

“EWA is a modern fintech product. It uses automation and API integration to streamline the underlying processes, making access easy while taking care of regulatory requirements. By using a cloud-native payroll platform such as ours, financial institutions extend EWA services to businesses and their employees. It’s fast, safe, and keeps overheads low,” said Warren van Wyk, director at Deel Local Payroll.

Concerns about whether workers might misuse the service remain, but so far the evidence suggests otherwise. According to Paymenow, the average worker only withdraws around 10% of their salary ahead of payday. Employers usually set limits, capping withdrawals at between 25% and 30% of earnings.

This level of restraint distinguishes EWA from exploitative credit systems where repayments and hidden charges quickly multiply. More importantly, it provides relief for workers who might otherwise spend hours at work distracted by their financial struggles. In reducing that stress, companies can also gain from improved productivity and employee wellbeing.

For many South Africans, the choice is between an exploitative loan or waiting until payday to cover emergencies. EWA offers a middle ground that gives workers control without trapping them in debt. “It’s amazingly seamless,” Van Wyk added. 

“In some examples, employees can access funds through USSD menus or apps on their phones, and the financial service provider handles most of the due diligence and compliance, not the employer. We’ve often heard that digital innovation can democratise finance for more South Africans. EWA is an excellent example of that promise in action.”

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The funding, led by Nu Holdings—Latin America’s most valuable fintech—brings Tyme’s valuation to $1.5 billion. Nu Holdings invested $150 million for a 10% stake, while M&G Catalyst Fund and existing shareholders contributed $50 million each.

Headquartered in Singapore, Tyme Group operates primarily in South Africa and the Philippines under its TymeBank and GoTyme Bank brands. 

With a customer base of over 15 million and goals to enter Vietnam and Indonesia in 2025, the group has become one of Africa’s few fintech unicorns. 

Its hybrid banking model, combining digital platforms with physical service points, has helped in addressing the financial needs of underbanked populations.

The latest investment from Nu Holdings aligns with its strategy to expand into underpenetrated financial markets. With its top place in Brazil, Mexico, and Colombia, Nu Holdings sees Tyme as a gateway to growth opportunities in Asia and Africa, regions marked by large unbanked populations and rising smartphone adoption.

“Having Nu Holdings as a shareholder not only brings financial support but also provides strategic counsel for our expansion plans,” said Coen Jonker, chairman and co-founder of Tyme Group. He emphasised the group’s focus on improving the financial lives of millions across its operating regions.

In addition to securing funding, Tyme has been actively scaling its operations. It has extended over $600 million in financing to small businesses and amassed $400 million in customer deposits in South Africa and the Philippines. 

Recent advancements include launching merchant cash advances in Vietnam and initiating its first transactions in Indonesia.

Jonker noted that the Philippines remains a top priority, with plans to establish GoTyme as the leading retail bank in the country. Indonesia is next on the agenda, with Tyme exploring acquisition opportunities to secure a banking licence in the region.

With this funding round potentially being its last, Tyme is preparing for an initial public offering (IPO) by 2028. The focus in the coming years will be on optimising operations and achieving strong returns, particularly in South Africa, where the group aims for a return on equity above 30%.

As one of South Africa’s only Black-owned and controlled commercial banks, Tyme Group is pushing innovation and inclusion in digital banking, bolstering the financial sector in emerging markets.

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As a sub-system of the bigger ecosystem, the Fintech, remains critical in addressing the quagmire of African financial ecosystem of which financial inclusion is cardinal.

But fundraising remains fundamental and central to driving every start-up to the point of outstanding results.

Like every other entrepreneurial voyage therefore, raising funds for Tech or fin-tech idea to fruition demands sustainability.

At Techeconomy, we have the responsibility of taking you through and demystifying the seemingly complex fundraising landscape hence our shielding of light into the top 10 Fintech Fundraiser (2023).

Let quickly point out from the onset, that Equity finance simply put is the issue of new shares in exchange for a cash investment. That is business receives the money it needs, and the investor will own a share in your company.

This means the investor will benefit from the success of the business. The Benefits may include proceeds from an eventual sale or buyout, and any dividends your business decides to pay before that happens.

An Equity investor can be anyone from the founder’s friends and family to a large private equity house – Angel investors and angel networks, the crowd (through crowdfunding platforms), Venture capitalists, Government funds Private equity funds among others.

The right equity investor should bring to your business more than just their money. Many will be well-connected through their previous investments or experience, and you can use their skills and experience to help grow your business.

On the other flip of the coin, Debt Funding (also referred to as debt financing or debt lending) is a way for a business to raise capital through means of borrowing. This funding will need to be repaid at an arranged later date, usually through regular repayments with added interest.

Therefore, Debt financing refers to taking out a conventional loan through a traditional lender like a bank. While Equity financing involves securing capital in exchange for a percentage of ownership in the business.

Listed below, are the Top Ten Fintech Fundraises in Africa in 2023 (Equity)     

1. Egypt’s MNT-Halan $260million   

The Egypt-based fintech MNT-Halan raised up to $400 million in equity and debt financing from local and global investors. The round includes $260 million in equity financing and $140 million through two securitized bond issuances secured within the past year, investments that will now see MNT-Halan command a post-money valuation of about $1 billion.

A large chunk of the equity, about $200 million, was provided by Abu Dhabi–based Chimera Investments, in exchange for 20 per cent of the Egyptian digital lender and e-commerce platform.

According to record, Mounir Nakhla and Ahmed Mohsen, co-founded MNT-Halan, in 2017, masterminding Egypt’s first billion-dollar private tech firm. A company which offers a diverse portfolio of financial and non-financial services ranging from lending, buy now pay later, e-commerce, payments, and mobility to on-demand logistics.

2. TymeBank Raised $78million (Digital Bank) 

The South African digital banking platform TymeBank has raised $77.8 million in a pre-Series C round led by African-focused growth-stage fund Norrsken22 and Swiss global impact investment firm Blue Earth Capital. TymeBank expects to close its Series C round in 2023.

Tencent, the lead investor in the fintech’s $70 million Series B extension raise earlier in December 2021, participated in this pre-Series C round and increased its stake to become TymeBank’s third-largest shareholder owned by Patrice Motsepe’s African Rainbow Capital (ARC); the South African fintech is backed by other investors.

These includes, but no limited to, the British International Investment (BII), Apis Growth Fund II. Others are, JG Summit Holdings (JG Summit), African Fig Tree (AFT) and the Ethos AI Fund. Beyond it present in South African, it’s also a member of the Tyme Group of companies headquartered in Singapore. The holding company, Tyme, focuses on designing, building and operating digital banks for emerging markets. Tyme’s brand in South Africa is TymeBank — and GoTyme in the Philippines, its first market in Asia, which the fintech launched last October in partnership with the Gokongwei Group.

Launched in February 2019, TymeBank employs a hybrid digital banking and physical service operations model. Offering a transactional bank account with zero or low monthly fees and a savings product to its customers, most of whom are onboarded via physical locations, including national retailers Pick n Pay and Boxer, top fashion retailer The Foschini Group (TFG) and one of the largest churches in South Africa, the Zion Christian Church.

3. Moove Raised $76 million Fund   

Moove, the world’s first mobility fintech, secured $76m in new funding, consisting of $28m in equity from new and existing investors.

In a process led by Mubadala Investment Company (Mubadala), $10m venture debt from funds and accounts managed by BlackRock, and $38m in previously undisclosed funds raised during the prior twelve months.

The African-founded business will use the funding to continue its mission to build the largest tech-driven financial services platform for mobility entrepreneurs and strengthen its position on the global stage.

Moove was founded in 2020 in response to the lack of vehicle financing faced by over two million African mobility entrepreneurs. Global interest has seen the business expand across multiple geographies. It is now working towards further global expansion with plans to launch multiple new products and a goal to reach profitability by the company year-end.

This investment serves as an endorsement of Moove’s ability to serve its customers and execute across multiple developing and developed markets. The funding signifies the start of a relationship that will also see Faris Sohail Al Mazrui, Head of Ventures & Growth at Mubadala, join the Moove advisory board.

Moove has gone from strength to strength since its inception, experiencing 17x revenue growth following its Series A fundraise two years ago, and empowering over 12k customers who have completed over 22 million trips in Moove-financed vehicles across 13 markets.

4. CASHPLUS fund-raised $60million Equity Fund   

CASH PLUS is one of the fastest-growing financial institutions in Africa. The company provides various financial services, including online payment and transfer services, bill settlements, and other modern payment solutions.

Led by Nabil Amar, who serve as the Chairman of the Board of Directors at the CASH PLUS Group.  Nabil Ammar is a Tunisian diplomat and politician who has served as Minister of Foreign Affairs since 7 February 2023. He formerly served as Ambassador to the European Union, Belgium and the United Kingdom.

Cashplus through a private equity firm, Mediterrania Capital Partners, which invested €57 million ($60 million) investment in Cash Plus, a Moroccan financial services provider.

The investment was made in collaboration with FMO, an entrepreneurial development bank from the Netherlands, and IFC, the private investment arm of the World Bank, according to a report from Ripples Nigeria. Cash Plus operates 3,600 physical locations across Morocco, making it one of the largest financial services providers in the country.

The combined €57 million investment is set to support Cash Plus’ expansion plans nationally and internationally.

The funding is expected to boost the company’s digital financial services offerings, especially its M-Wallet application which currently serves more than 1 million customers.

5. M-Kopa Raised $55million Equity Fund

The $55 million equity funding round was led by existing backer Sumitomo Corporation, which invested $36.5 million. Blue Haven Initiative, Lightrock, Broadscale Group and Latitude also contributed.

Founded in 2011, M-Kopa provides digital financial services to underbanked consumers in Kenya, Uganda, Nigeria and Ghana. The company provides flexible credit to people with limited pre-existing financial identities and conventional collateral to buy smartphones, solar power systems, digital loans and health insurance, which can be paid off through micro-instalments over time.

With the new funding, M-Kopa plans to grow its smartphone services, expand into new markets and increase its product offerings. It also plans to deploy the cash to help boost financial inclusion among women and reduce greenhouse gas emissions in East Africa.

The company says the sustainability-linked debt financing is also structured to help the firm hit its environmental and social targets.

6. LULA Raised $35million Equity Fund

The South African digital lender Lulalend secured a $35 million (~R600 million) Series B round, led by Lightrock with participation from investors including DEG, Triodos Investment Management, Women’s World Banking Asset Management. Other existing investors includes the International Finance Corporation (IFC) and Quona Capital also took part.

The startup said that the funding will be used to service the surging demand for the fast access to working capital, the company offers businesses and accelerate the rollout of Lula, its digital banking offering for SMEs. Lula offers a bank account specifically tailored for SMEs, an AI-driven cash flow management tool and real-time access to funding via Lulalend’s existing funding solutions.

Founded in 2014, Lulalend, South Africa’s first online automated provider of business funding, uses proprietary AI technology to simplify cash flow management for business owners. From instant access to funding, to all-in-one business bank accounts and cutting-edge financial analysis tools, Lulalend provides tools that empower SMEs across South Africa to succeed.

According to the International Finance Corporation, Lulalend will use the capital to scale its business and address South Africa’s enduring SME credit gap, which is estimated to be more than US$20 billion per year.

Trevor Gosling is the Co-founder and CEO of Lulalend. He Previously worked at 5ounces as a Founder and CEO. Trevor Gosling attended the University of Pretoria.

7. LEMFI Raised $33million Equity

LEMFI unveiled a series A funding round of $33 million, spearheaded by Left Lane Capital. Global Founders Capital, Zrosk, Y Combinator, and Olive Tree are joining this round as investors.

Since its inception in 2020, the startup obtained an IMTO license in Nigeria and successfully finalized the acquisition of Rightcard Payment Services in the UK. This acquisition has empowered LemFi to facilitate larger transaction sums and offer enhanced security for user funds. Conversely, the IMTO license ensures the direct processing of remittances to Nigerian bank accounts, eliminating the need for intermediaries. In June, the company also expanded its services to Kenya and underwent a name change from “Lemonade Finance” to “LemFi.”

LemFi was founded by Ridwan Olalere, who had prior experience at companies like Flutterwave and Uber. This was a motivating factor, launching LemFi stemmed from the desire to address challenges they had encountered at OPay. Among the issues they recognized was the difficulty of conducting cross-border payments within the continent. Additionally, they found the prospect of facilitating payments from Western countries to be an equally appealing problem to tackle.

8. Peach Payments Raised $31MILLION

The South African fintech startup Peach Payments raised a US$31 million Series A funding round from Apis Partners to accelerate a private equity fund managed by Apis Partners, a UK-based asset.  its growth across the continent and grow its product offering.

Founded in Cape Town in 2012, Peach Payments provides a complete toolkit to help businesses accept, manage and disburse payments through web and mobile. It is the second largest online payment gateway in South Africa and has also expanded to Kenya and Mauritius.

Peach Payment has experienced exceptional growth in recent years, with revenue increasing more than 650 per cent since 2020, and 80 per cent in 2022 alone, and it is now planning further expansion after raising US$31 million in Series A funding.

Rahul Jain is the pioneer who got the concept of Business Coaching to India, 19 years ago and the Founder Director of Business Coaching India LLP.

A professional (Engg & M.B.A) with over 25 years’ hands-on experience, with blue chip companies such as TATAMOTORS and then as a serial entrepreneur.

9. Nomba Raised $30million Equity Fund

Nomba, a Nigerian payment startup, also raised $30 million in a pre-Series B investment. The round was led by San Francis co-based Base10 Partners (investors in Nubank, Plaid and Brex), with participation from Helios Digital Ventures, Shopify, Partech, and Khosla Ventures.

With the new funding, the startup said it would deliver payment solutions that have been designed for the specific services that businesses provide. This will enable them to plug gaps in their payment processes and operate more efficiently to deliver excellent customer experiences.

Formerly known as Kudi, the start-up was founded in 2016 by Yinka Adewale and Pelumi Aboluwarin as a chatbot designed to simplify payments.  In 2018, it evolved into a company whose distinct point of sale (POS) technology, partnerships with banks and other licensed financial institutions democratized access to banking products and services for merchants across Nigeria.

This, the startup said, also includes core banking solutions such as opening savings accounts and loans. According to the startup, it serves over 300,000 businesses and processes $1 billion in monthly transactions.

10. Stitch Raised $25million through Equity Fund. 

After raising $21 million in 2022, Stitch secured an additional $25 million in funding, bringing its total Series A funding to $46 million.

Ribbit Capital led the round, with participation from existing investors such as CRE Ventures, PayPal Ventures, and the Raba Partnership. The South African API fintech startup, which came out of stealth in 2021, claims to have created an end-to-end payment solution built to meet its clients’ complex and evolving payment needs. So, it wants to use the funds to dominate the payment market.

Stitch, was founded by Kiaan Pillay (CEO), Natalie Cuthbert, and Priyen Pillay, focuses on empowering companies to create, optimize, and scale financial products and provides API gateways to increase online payment conversion and streamline payment processes for its clients.

Essentially, Stitch was a data, bank-to-bank payments platform before going on a feature release binge.

Its customers, who ranged from businesses to sole proprietors, could access their financial accounts and innovate around offering services like personal finance, lending, insurance, payments, and wealth management.

The post Top 10 Fintech (Equity) Fundraises in Africa in 2023 appeared first on Tech | Business | Economy.

Led by Norrsken22, an African-focused growth stage fund and Blue Earth Capital, a Swiss global impact investment firm, TymeBank will now broaden its South Africa and Philippines operations, while stepping into Southeast Asia.

Other investors backing TymeBank include Tencent, who is now the firm’s third-largest shareholder, African Rainbow Capital (ARC), British International Investment (BII), Apis Growth Fund II, JG Summit Holdings (JG Summit), African Fig Tree (AFT), and the Ethos AI Fund.

An arm of Tyme Group, headquartered in Singapore, TymeBank was launched in 2019 by Founder Coen Jocker. TymeBank embraces a unique banking approach that combines the benefits of both digital and physical services. It provides customers with a transactional bank account that incurs minimal or zero monthly fees, along with an appealing savings product. 

The majority of its customer base is acquired through physical locations, which include renowned national retailers such as Pick n Pay and Boxer, as well as the esteemed fashion retailer, The Foschini Group (TFG), and the influential Zion Christian Church, one of South Africa’s largest religious institutions. However, TymeBank has also experienced a substantial influx of customers who have opened accounts online, reflecting a growing trend toward electronic transfers over traditional cash deposits.

TymeBank is making significant strides in its operations, demonstrating impressive growth across South Africa and the Philippines. With a remarkable influx of 300,000 new customers each month, the company is achieving a revenue run rate surpassing $100 million annually. 

This exponential rise in customer numbers serves as a testament to TymeBank’s ability to effectively address consumers’ needs. Initially emerging as a disruptor in the banking industry, the company has now solidified its position as a reliable and viable alternative to traditional banks in the country.

TymeBank’s global presence extends beyond its core operations. It maintains a product development and engineering hub in Vietnam, where innovative solutions are crafted. Additionally, its headquarters in Singapore oversees strategic initiatives, business development, data analytics, and artificial intelligence (AI) functions, further cementing its commitment to driving growth and leveraging cutting-edge technologies in the financial sector.

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Kuda beat four other major African fintechs – TymeBank, Moniepoint, FairMoney and MNT-Halan – to clinch the award. 

Kuda, alongside the four fintechs, was nominated for the award by the Africa Fintech Summit earlier this year. The winner of the award was selected through an open voting system.

A representative of Kuda received the award on the company’s behalf at the Africa Fintech Summit ceremony in Washington, DC, on April 12, 2023.

Commenting on the award, Babs Ogundeyi, Founder/CEO of Kuda, said the company, and indeed the entire staff of Kuda, were excited at winning the Africa Fintech Summit’s 2023 Excellence in Digital Banking award.

He said the recognition was an acknowledgement of the commitment and resilience of the Kuda team to building innovative solutions that increase access for Africans living on the continent and those in the Diaspora to enjoy affordable and quality financial services at all times. 

“In almost four years of building the money app for Africans, awards like this have been a meaningful acknowledgement of the work we are doing to make financial services accessible, affordable and rewarding on the continent and in diaspora,” he stated. 

Ogundeyi congratulated fellow nominees and expressed gratitude to everyone who voted for Kuda to win the award. He also thanked the AFTS team for the recognition, while assuring that the Kuda team will keep up the good work.

“It’s no small feat to beat out four other fast-rising African fintechs to this award, and I’m excited about the next phase of our mission to make financial services accessible and affordable for all Africans. Congratulations to the Kuda team!,” Ogundeyi enthused further. 

AFTS is the largest bi-annual gathering of financial technology stakeholders on the African continent: welcoming over 4,000 stakeholders from across over 100 countries since its first summit in early 2018. The AFTS was founded in 2017 with the mission of bringing the issues, trends, and changemakers impacting Africa’s financial technology ecosystem together.

Kuda is a fintech company operating in Nigeria and the United Kingdom. Co-founded by Babs Ogundeyi and Musty Mustapha in 2019, Kuda is valued at US$500 million and has raised over US$90 million from investors including Target Global and Valar Ventures. 

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Launched in 2011, Retail Capital has funded over 43,000 businesses with more than $329 million in working capital. The acquisition will enhance its impact as it becomes a division of TymeBank and the foundation of the bank’s expanded business banking offering.

With this acquisition, TymeBank will include working capital finance to its offerings for entrepreneurs who can also buy stocks and resources required to boost the growth and development of their business. 

TymeBank believes owner-managed businesses, as well as small businesses are the most underserved and under-capitalised segment of the South African economy. In this regard, Retail Capital has a unique set of capabilities that will allow TymeBank to accelerate its business banking proposition.

Coen Jonker, CEO of TymeBank notes: “This acquisition will enable TymeBank to expand its offering to entrepreneurs to include working capital finance. Retail Capital has acquired significant risk management experience over the past decade and through different economic cycles. They have an experienced team in place and their risk models and operational processes have been battle-tested and optimised to a significant degree for small-business funding.

“Together, we look forward to providing access to innovative solutions to ensure business owners can fuel their growth, drive job creation and contribute to the broader economy.”

TymeBank affirms to have a customer base of five million, 100,000+ small businesses, entrepreneurs and owner-managed businesses, added to a growth rate of about 150,000 new customers month-on-month.

The bank will include the provision of new offerings to SMEs, including TymePOS and TymeTrybe.

The TymePOS is a mobile point-of-sale app that turns an NFC-enabled cellphone into a tap-and-go payment device. While the TymeTrybe is a financial community platform that equips business owners with a range of business tools, accredited courses and other educational services, as well as access to networking opportunities.

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