| Morocco | Chari acquires AXA Credit for $22m. Chari, a B2B ecommerce and fintech company focused on Francophone Africa, has acquired AXA Credit, the Moroccan credit arm of insurance giant, AXA. The investment, which is still subject to approval of relevant authorities, will enable Chari to provide credit solutions to its B2B customers. Waya Media |
| | EDITOR'S NOTE | This continues a positive trend of B2B e-commerce companies offering both direct financing to their merchants, and infrastructure for these merchants to provide credit to their customers. These startups already collect significant purchase and inventory data, and are poised to understand and underwrite these commerce businesses. We expect this trend to extend beyond credit to other financial services like liquidity management, insurance, and digital as these startups grow into full-service operating systems for commerce in Africa. |
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| Africa | Mercury restricts banking access for African startups. Mercury Bank, a company that provides US banking services for startups worldwide, recently placed restrictions on the bank accounts of a number of African startups. This was reportedly due to suspicious activity raised by Mercury’s banking partner. These restrictions put their bank accounts on hold, and prevented the affected startups from accessing funds. TechCrunch |
| | EDITOR'S NOTE | Some founders have since confirmed that the restrictions were lifted after providing additional KYC and compliance information.
Although modern interfaces for money movement and management have successfully leveraged software and the internet to allow global reach, underlying financial strata like risk, KYC, fraud mitigation need local context.
Financial service companies with global demand have to figure out how to serve clients in markets where they don’t have a deep understanding of the customer’s payment behaviour. Most times, these companies design processes based on limited assumptions about fraud and risk in the African market, disrupting the experience for African businesses and consumers. This problem extends beyond just banking to payments, card issuing, and cross-border remittance.
Many stakeholders have called for an African-built and owned banking infrastructure to address these problems. However, technology is not the only reason African startups use providers like Mercury. In 2021, African startups raised $6B in debt and equity funding. Many of these VC firms prefer to fund a US entity, requiring these startups to incorporate and open bank accounts in the US. As the African market matures, this trend might shift, but as long as the loci of venture operation and capital allocation are different, we might continue to have these problems in the short term.
There’s still an opportunity for fintech solutions that provide seamless and reliable banking services to African startups, and do the hard work of applying global compliance laws to account for regional use. If you are building this, please email us! |
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| South Africa | Capital Appreciation acquires Responsive Technology Group (RTG) for $3.2m. Capital Appreciation Group, which provides payment and software services, has acquired RTG, for R48.68m (~$3.2m). RTG provides digital and software development services for large financial service firms. Of the RTG companies, Capital Appreciation will acquire 100% of Responsive Tech and Responsive Digital, and 71% majority stake in Rethink Digital Solutions. IT Web |
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| Kenya | Central Bank of Kenya (CBK) grants JamboPay a payments license. The Kenyan company has received a Payment Service Provider (PSP) license from the Central Bank of Kenya. JamboPay provides an online payment gateway for individuals and businesses to make and receive payments online. The new license allows the Kenyan fintech to provide payment gateway, e-wallet and consumer services. Mobile Money Africa |
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| Africa | Beyond the banking in agency banking. Abiola Usman (@Abiola_Usman) highlights under-explored opportunities with agency banking beyond cash-in and cash-out services. Twitter |
| | EDITOR'S NOTE | Mobile money and agency banking services like M-PESA in Kenya already provide additional services like lending to their customers with notable success. Fintechs like TeamApt are also reportedly exploring loans using their Moniepoint agents in Nigeria. As private credit and identity infrastructure continue to mature, we expect an inevitable service expansion in markets with heavy agency banking concentration. |
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| Africa | What happens to our money when we die? Adora Nwodo (@AdoraNwodo) sparks an interesting discussion on how African fintechs handle the financial assets of users who have passed on. Twitter |
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| Kenya | M-Kopa raises $75 million in growth equity round. M-Kopa offers installmental payment options on electronic appliances and devices. Customers can make an initial deposit on a product and make payments over time.The Kenyan company has raised funds to expand its product offerings and launch in new markets. This growth equity round of funding was led by Generation Investment Management and Broadscale Group alongside other investors. TechCrunch |
| | EDITOR'S NOTE | It’s interesting to note that M-Kopa started off with just financing on solar powered home systems but has since expanded to offering payment options for other solar-powered appliances (such as TV’s and refrigerators). This allows the company to leverage their risk model to more customers and potentially gain more revenue. |
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| Kenya | Valr raises $50 million in Series B funding. VALR operates a cryptocurrency exchange that allows individuals to buy, sell, store and transfer Bitcoin and 60 other cryptocurrencies. The fintech has raised funds to expand across Africa and other emerging countries such as India, develop its product and hire new team members. Participants in this round include Alameda Research, Cadenza, CMT Digital, Coinbase Ventures and others. Kenyan Wall Street |
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| Kenya | FonBnk raised $3.5m in seed funding. Issue Wire |
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| Nigeria | Canza Finance raises $3.27 million in seed round. TechCabal |
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| Africa | Stax raised $2.2m in funding round. TechCrunch |
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