Africa through the tech ecosystem is constantly redefining, simplifying, alternating creating definite path and pattern.
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.
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