To become a global fintech player, locate your company in San Francisco and Africa.
That’s the approach of payments company Flutterwave, digital lending startup Mines, and mobile-money venture Chipper Cash—Africa-founded ventures that maintain headquarters in San Francisco and operations in Africa to tap the best of both worlds in VC, developers, clients, and the frontier of digital finance.
This arrangement wasn’t exactly coordinated across the ventures, but TechCrunch coverage picked up the trend and some common motives among these rising fintech firms.
Founded in 2016 by Nigerians Iyinoluwa Aboyeji and Olugbenga Agboola, Flutterwave has positioned itself as a global B2B payments solutions platform for companies in Africa to pay other companies on the continent and abroad.
Clients can tap its APIs and work with Flutterwave developers to customize payments applications. Existing customers include Uber, Facebook, Booking.com and African e-commerce unicorn Jumia.com.
The Y-Combinator backed company is headquartered in San Francisco, runs its operations center in Nigeria, and plans to add offices in South Africa and Cameroon.
Flutterwave opened an office in Uganda in June and raised a $10 million Series A round in October. The company also plugged into ledger activity in 2018, becoming a payment processing partner to the Ripple and Stellar blockchain networks.
XPRIZE, the non-profit organization developing and managing competitions to find solutions to social challenges, has named two grand prize winners in the Elon Musk-backed Global Learning XPRIZE .
The companies, KitKit School out of South Korea and the U.S., and onebillion, operating in Kenya and the U.K., were announced at an awards ceremony hosted at the Google Spruce Goose Hangar in Playa Vista, Calif.
XPRIZE set each of the competing teams the task of developing scalable services that could enable children to teach themselves basic reading, writing, and arithmetic skills within 15 months.
Musk himself was on hand to award $5 million checks to each of the winning teams.
Five finalists including: New York-based CCI, which developed lesson plans and a development language so non-coders could create lessons; Chimple, a Bangalore-based, learning platform enabling children to learn reading, writing and math on a tablet; RobotTutor, a Pittsburgh-based company which used Carnegie Mellon research to develop an app for Android tablets that would teach lessons in reading and writing with speech recognition, machine learning, and human computer interactions, and the two grand prize winners all received $1 million to continue developing their projects.
The tests required each product to be field tested in Swahili, reaching nearly 3,000 children in 170 villages across Tanzania.
All of the final solutions from each of the five teams that made it to the final round of competition have been open-sourced so anyone can improve on and develop local solutions using the toolkits developed by each team in competition.
Kitkit School, with a team from Berkeley, Calif. and Seoul, developed a program with a game-based core and flexible learning architecture to help kids learn independently, while onebillion, merged numeracy content with literacy material to provide directed learning and activities alongside monitoring to personalize responses to children’s needs.
Both teams are going home with $5 million to continue their work.
The problem of access to basic education affects more than 250 million children around the world, who can’t read or write and one-in-five children around the world aren’t in school, according to data from UNESCO.
The problem of access is compounded by a shortage of teachers at the primary ad secondary school level. Some research, cited by XPRIZE, indicates that the world needs to recruit another 68.8 million teachers to provide every child with a primary and secondary education by 2040.
Before the Global Learning XPRIZE field test, 74% of the children who participated were reported as never having attended school; 80% were never read to at home; and 90% couldn’t read a single word of Swahili.
After the 15 month program working on donated Google Pixel C tablets and pre-loaded with software, the number was cut in half.
“Education is a fundamental human right, and we are so proud of all the teams and their dedication and hard work to ensure every single child has the opportunity to take learning into their own hands,” said Anousheh Ansari, CEO of XPRIZE, in a statement. “Learning how to read, write and demonstrate basic math are essential building blocks for those who want to live free from poverty and its limitations, and we believe that this competition clearly demonstrated the accelerated learning made possible through the educational applications developed by our teams, and ultimately hope that this movement spurs a revolution in education, worldwide.”
After the grand prize announcement, XPRIZE said it will work to secure and load the software onto tablets; localize the software; and deliver preloaded hardware and charging stations to remote locations so all finalist teams can scale their learning software across the world.
WorldCover, a New York and Africa-based climate insurance provider to smallholder farmers, has raised a $6 million Series A round led by MS&AD Ventures.
Y-Combinator, Western Technology Investment, and EchoVC also participated in the round.
WorldCover’s platform uses satellite imagery, on-ground sensors, mobile phones, and data analytics to create insurance options for farmers whose crops yields are affected adversely by weather events—primarily lack of rain.
The startup currently operates in Ghana, Uganda, and Kenya . With the new funding WorldCover aims to expand its insurance offerings to more emerging market countries.
“We’re looking at India, Mexico, Brazil, Indonesia. India could be first on an 18 month timeline for a launch,” WorldCover co-founder and chief executive Chris Sheehan said in an interview.
The company has served over 30,000 farmers across its Africa operations. Smallholder farmers as those earning all or nearly all of their income from agriculture, farming on 10 to 20 acres of land, and earning around $500 to $5000, according to Sheehan.
Farmer’s connect to WorldCover by creating an account on its USSD mobile app. From there they can input their region, crop type, determine how much insurance they would like to buy and use mobile money to purchase a plan. WorldCover works with payments providers such as M-Pesa in Kenya and MTN Mobile Money in Ghana.
The service works on a sliding scale, where a customer can receive anywhere from 5x to 15x the amount of premium they have paid. If there is an adverse weather event, namely lack of rain, the farmer can file claim via mobile phone. WorldCover then uses its data-analytics metrics to assess it, and if approved, the farmer will receive an insurance payment via mobile-money.
Common crops farmed by WorldCover clients include maize, rice, and peanuts. It looks to add coffee, cocoa, and cashews to its coverage list.
For the moment, WorldCover only insures for events such as rainfall risk, but in the future it will look to include other weather events, such as tropical storms, in its insurance programs and platform data-analytics.
The startup’s founder clarified that WorldCover’s model does not assess or provide insurance payouts specifically for climate change, though it does directly connect to the company’s business.
“We insure for adverse weather events that we believe climate change factors are exacerbating,” Sheehan explained. WorldCover also resells the risk of its policy-holders to global reinsurers, such as Swiss Re and Nephila.
On the potential market size for WordCover’s business, he highlights a 2018 Lloyd’s study that identified $163 billion of assets at risk, including agriculture, in emerging markets from negative, climate change related events.
“That’s what WorldCover wants to go after…These are the kind of micro-systemic risks we think we can model and then create a micro product for a smallholder farmer that they can understand and will give them protection,” he said.
With the round, the startup will look to possibilities to update its platform to offer farming advice to smallholder farmers, in addition to insurance coverage.
WorldCover investor and EchoVC founder Eghosa Omoigui believes the startup’s insurance offerings can actually help farmers improve yield. “Weather-risk drives a lot of decisions with these farmers on what to plant, when to plant, and how much to plant,” he said. “With the crop insurance option, the farmer says, ‘Instead of one hector, I can now plant two or three, because I’m covered.”
Insurance technologyis another sector in Africa’s tech landscape filling up with venture-backed startups. Other insurance startups focusing on agriculture include Accion Venture Lab backed Pula and South Africa based Mobbisurance.
With its new round and plans for global expansion, WorldCover joins a growing list of startups that have developed business models in Africa before raising rounds toward entering new markets abroad.
In 2018, Nigerian payment startup Paga announced plans to move into Asia and Latin America after raising $10 million. In 2019, South African tech-transit startup FlexClub partnered with Uber Mexico after a seed-raise. And Lagos based fintech startup TeamAPT announced in Q1 it was looking to expand globally after a $5 million Series A round.
With the public listing, Jumia became the first startup from Africa to list on a major global exchange. The IPO raised nearly $200 million for the internet venture.
The listing created another milestone for Jumia. In 2016 the company became the first African startup unicorn, achieving a $1 billion valuation after a funding round that included Goldman Sachs and MTN.
Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries—from consumer retail to travel bookings.
Jumia has also opened itself up to Africa’s traders with more than 80,000 active sellers on the platform.
Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.
On the flipside, original Jumia co-founders (Tunde Kehinde and Raphael Afaedor) are Nigerian. The company is headquartered in Africa (Lagos) and incorporated in each country in which it operates (under ECART Internet Services in Nigeria). Jumia pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1) and the CEO of its largest country operation Juliet Anammah is Nigerian.
The Jumia authenticity and diversity debates will no doubt continue. But the biggest question — the driver behind the VC, the IPO, and demand for Jumia’s shares — is whether the startup can produce profits. The company has generated years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.
Call it coincidence or competition, but the day before Jumia’s IPO, DHL partnered with another e-commerce startup—MallforAfrica.com—to launch its DHL Africa eShop app for global retailers to sell goods to Africa’s consumers markets.
The platform brings more than 200 U.S. and U.K. retailers — from Neiman Marcus to Carters — online in 11 African countries.
There’s a new $100 million plus African VC fund in the works. Tunisia-based private equity firm Africinvest teamed up with Cathay Innovation to announce the Cathay Africinvest Innovation Fund, with a target raise of $168 million.
Details are still forthcoming, but the fund will focus primarily on Series A to C-stage investments in startups across several countries in the areas of fintech, logistics, AI, agtech and edutech. Investments could begin as early as 2019, fund co-founder Denis Barrier told TechCrunch.
He expects to see strong local showing for startups from across Africinvest’s 10 country offices in North and Sub-Saharan African. The firm will open an office in Johannesburg in the near future, according to a company release.
Zipline expands in Ghana
Zipline, the San Francisco-based UAV manufacturer and logistics services provider, launched a program in Ghana for drone delivery of medical supplies.
Working with the Ghanaian government, Zipline will operate 30 drones out of four distribution centers to distribute vaccines, blood and life-saving medications to 2,000 health facilities across the West African nation daily. Speaking to TechCrunch, the company’s CEO Keller Rinaudo described the Ghana operation as “the largest drone delivery network on the planet,”
The Ghana program adds a second country to Zipline’s live operations. Zipline got off the ground in Rwanda and has leveraged its experience in East Africa to begin testing medical delivery services in the United States. Zipline plans to move from pilot-phase to live-delivery of medical supplies in the U.S. sometime this summer.
ConnectMed acquired by Merck
And finally, German pharmaceutical company Merck KGaa acquired the technology of Kenya based online healthtech company ConnectMed. A 2017 Startup Battlefield Africa competitor, ConnectMed paired up telehealth kiosks to local pharmacies—turning them into online clinics where patients use the startup’s tablet based app to connect live to doctors for evaluation and prescriptions. The startup had received grant and seed funds from UK based Entrepreneur First and Norway’s Katapult Accelerator.
Merck KGaa (not be confused with U.S. pharmaceutical company Merck) took over ConnectMed’s telehealth applications. “Following the handover of the company’s telehealth solutions to Merck…ConnectMed will cease operations,” said a company release on the deal. Merck will integrate ConnectMed’s platform into its own CURAFA clinic network in Kenya.
Zipline, the San Francisco-based UAV manufacturer and logistics services provider, has launched a program in Ghana today for drone delivery of medical supplies.
Working with the Ghanaian government, Zipline will operate 30 drones out of four distribution centers to distribute vaccines, blood, and life-saving medications to 2000 health facilities across the West African nation daily.
“We’ll do 600 flights day…and serve 12 million people. This is going to be the largest drone delivery network on the planet,” Zipline CEO Keller Rinaudo told TechCrunch on a call from Accra.
“No one in Ghana should die because they can’t access the medicine they need in an emergency,” Ghana’s President Nana Akufo-Addo said in a statement. “That’s why Ghana is launching the world’s largest drone delivery service…a major step towards giving everyone in this country universal access to lifesaving medicine.”
The Ghana program adds a second country to Zipline’s live operations. Zipline got off the ground in Rwanda and has leveraged its experience in East Africa to begin testing medical delivery services in the United States.
Founded in 2014, Zipline designs and manufactures its own UAVs, launch and landing systems, and logistics software. After a testing period in coordination with the government of Rwanda, Zipline went live in the East African country in 2016, claiming the first national drone-delivery program at scale in the world.
Through its non-profit foundation, the logistics giant UPS came in to partner with Zipline on the Rwanda program, and that support continues.
“They’re providing funding to build a lot of the infrastructure required, they are an adviser to us, and they provide some logistical support in moving equipment,” Rinaudo said of Zipline’s collaboration with the UPS Foundation. Zipline has also received grants and support from from The Bill and Melinda Gates Foundation, and Pfizer .
Zipline then carried its experience in Africa to the U.S. In May 2018 the startup was accepted into the U.S. Department of Transportation’s Unmanned Aircraft Systems Integration Pilot Program (UAS IPP). Out of 149 applicants, the Africa focused startup was one of 10 selected to participate in a drone pilot in the U.S.—and started testing beyond visual line of sight medical delivery services in North Carolina.
“Healthcare logistics is a $70 billion global industry, and it’s still only serving a golden billion on the planet,” says Rinaudo. “The economics of our business is pretty simple. We’re using small, electric, fully autonomous vehicles…these kinds of systems are much more efficient than the analog way of delivering things.”
Zipline is eyeing additional countries for delivery operations beyond Ghana, Rwanda, and its pilot operations in the U.S. “We’ll be launching in several additional countries, not all of which are in Africa,” said Rinaudo, though he declined to disclose specifics.
Zipline is well aware that its drone logistics systems have applications beyond medical supply chain services and Rinaudo confirmed moving cargo other than medical supplies is something Zipline has considered.
Over the last two years South Africa passed commercial drone legislation to train and license pilots and Malawi opened a Drone Test Corridor to African and global partners. Over the same period, Kenya, Ghana, and Tanzania have issued or updated drone regulatory guidelines and announced future UAV initiatives. The government of Tanzania launched a medical drone delivery program in 2019, with DHL as one of the main partners.
In addition to its launch today in Ghana, Zipline plans to move from pilot-phase to live-delivery of medical supplies in the U.S. sometime this summer, a company spokesperson confirmed.
With the public offering, Jumia becomes the first startup from Africa to list on a major global exchange.
In an updated SEC filing, Jumia indicated it is offering 13,500,000 ADR shares for an opening price spread of $13 to $16 per share, representing 17.6 percent of all company shares. The IPO could raise up to $216 million for the internet venture.
Since the original announcement (and reflected in the latest SEC docs), Mastercard Europe pre-purchased $50 million in Jumia ordinary shares.
The IPO creates another milestone for Jumia. The company in 2016 became the first African startup unicorn, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.
There’s a lot to break down on Jumia’s going public. The company is often dubbed the “Amazon of Africa,” and like Amazon, Jumia comes with its own mixed buzz. Jumia’s SEC F-1 prospectus offers us more insight into the venture, and perhaps any startup from Africa, thus far.
Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.
Jumia’s original co-founders included Nigerian tech entrepreneurs Tunde Kehinde and Raphael Afaedor, but both departed in 2015 to form other startups in fintech and logistics.
Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape. Jumia has extended this infrastructure as an e-commerce fulfillment product called Jumia Services.
Jumia has also opened itself up to Africa’s traders by allowing local merchants to harness Jumia to sell online. The company has more than 80,000 active sellers on the platform using the company’s payment, delivery and data-analytics services, Jumia Nigeria CEO Juliet Anammah told TechCrunch previously.
The most popular goods on Jumia’s shopping site include smartphones, washing machines, fashion items, women’s hair care products and 32-inch TVs, according to Anammah.
Jumia an African startup?
Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.
On the flipside, original Jumia co-founders (Kehinde and Afaedor) are African. The company is headquartered (and also incorporated) in Africa (Lagos), operates exclusively in Africa, pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1) and the CEO of its largest country operation (Nigeria) Juliet Anammah is Nigerian.
The Africa authenticity debate often shifts into questions of a Jumia diversity deficit, which is of course important from Silicon Valley to Nairobi. The company’s senior management and board is a mix of Africans and expats. Golden State Warriors basketball player and tech investor Andre Iguodala joined Jumia’s board this spring with a priority on “diversity and making sure the African culture is in the company,” he told TechCrunch.
Can Jumia turn a profit?
The Jumia authenticity and diversity debates will no doubt roll on. But the biggest question — the driver behind the VC, the IPO, the founders and the people buying Jumia’s shares — is whether the startup can generate profits and ROI.
Obviously some of the world’s top venture investors, such as Jumia backers Goldman, AXA and Mastercard, think so. But for Jumia skeptics, there are the big losses. The company has generated years and years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.
To be fair to Jumia, most startups (e-commerce startups in particular) rack up losses for years before getting into the black. And operating in a greenfield sector in Africa — where it had to create much of the surrounding infrastructure to do B2C online sales — has presented higher costs for Jumia than e-commerce startups elsewhere.
On the prospects for Jumia’s profitability, two things to watch will be Jumia’s fulfillment expenses and a shift to more revenue from its non-goods-delivery services, which offer lower unit costs and higher-margins. Per Jumia’s SEC F-1 index (see above), freight and shipping make up more than half of its fulfillment expenses.
So Jumia has not turned a profit, but its revenues have increased steadily, up 11 percent to €93.8 million (roughly $106.2 million) in 2017 and up again to €130 million (or $147 million) in 2018. If the company boosts customer acquisition and lowers fulfillment costs — which could come from more internet services revenue and platform investment with IPO capital — it could close the gap between revenues and losses. This reflects the equation for most e-commerce startups. With the IPO, Jumia will have to publish its first full public financials in 2019, which will provide a better picture of profitability prospects.
Jumia’s IPO and African e-commerce?
There is, of course, a bigger play in Jumia’s IPO. One connected to global e-commerce and the future of online retail in Africa.
Jumia going public comes as Africa’s e-commerce landscape has seen its share of ups and downs, notably several failures in DealDey shutting down and the distressed acquisition of Nigerian e-commerce hopeful Konga.com.
As for the big global names, Alibaba has talked about Africa expansion, but for the moment has not entered in full.
And this week, DHL came on the scene, launching its Africa eShop platform with 200 global retailers on board, in partnership with MallforAfrica’s Link Commerce fulfillment service.
Competition to capture Africa’s digitizing consumer markets — expected to spend $2 billion online by 2025, according to McKinsey — could get fierce, with more global entries, acquisitions and competition on fulfillment services all part of the mix.
And finally, the outcome of Jumia’s IPO carries weight even for its competitors. “Many things, like business decisions and VC investments across Africa’s e-commerce sector are on hold,” an African e-commerce exec told TechCrunch on background.
“Everyone’s waiting to see what happens with Jumia’s IPO and how they perform,” the exec said.
So the share price connected to NYSE ticker sign JMIA could reflect not just investor confidence in Jumia, but investor confidence in African e-commerce overall.
DHL is launching an e-commerce app called DHL Africa eShop for global retailers to sell goods to Africa’s consumers markets.
The platform goes live today and brings more than 200 U.S. and UK retailers—from Nieman Marcus to Carters—online in 11 African markets: South Africa, Nigeria, Kenya, Mauritius, Ghana, Senegal, Rwanda, Malawi, Botswana, Sierra Leone, and Uganda.
The announcement comes as e-commerce in Africa has seen some ups and downs—with online sales startup Jumia announcing an IPO, while several Africa digital retail ventures have recently faltered.
DHL Africa eShop takes advantage of shipping giant’s existing delivery structure on the continent, able to get goods to doorsteps near and far through its DHL Express shipping, tracking, and courier service.
DHL’s partner for the new app, MallforAfrica, has experience collaborating with DHL and a number of big name retailers, including Macy’s and Best Buy. Backed by Helios Investment Partners, MFA was founded in 2011 to solve challenges global consumer goods companies face when entering Africa.
MallforAfrica’s payment and delivery system serves as a digital broker and logistics manager for U.S. retailers that come online with the startup to sell their goods to African consumers.
DHL has been a MallforAfrica logistics partner since 2015 and in 2018, the two teamed up to launch MarketPlaceAfrica.com—an e-commerce site for select African artisans to sell their goods in any of DHL’s 220 delivery countries.
For DHL Africa eShop, MallforAfrica’s Link Commerce service will facilitate local payments, procurement, and delivery, MallforAfrica CEO Chris Folayan told TechCrunch.
“That’s what our service does. It takes care of that whole ecosystem to enable global e-commerce to exist, no matter what country you’re in,” he said.
In a statement, DHL Express CEO for Sub-Saharan Africa referred to the DHL Africa eShop app as something that “provides convenience, speed, and access to connect African consumers with exciting brands.” The DHL Africa app is also intended to fill a commercial void, according to DHL, as many U.S. and UK retailers do not ship to Africa.
E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.
As mentioned, Africa’s e-commerce startup landscape has seen its own ups and downs. Pan-African e-commerce startup Jumia’s recent IPO filing on the NYSE is a first for any startup from Africa. MallforAfrica has also continued to expand into new countries, now operating in 17, with partners, such as DHL.
On the flip side, the distressed acquisition of Nigerian e-commerce hopeful Konga.com, backed by roughly $100 million in VC, created losses for investors. And in late 2018, Nigerian online sales platform DealDey shut down.
On a B2C level, DHL Africa eShop brings distinct advantages on a transaction cost basis (i.e., the cost of delivery) given it is connected to one of the world’s logistics masters, DHL.
Another component of DHL and MallforAfrica’s partnership is the market for offering e-commerce fulfillment services through MallforAfrica’s white label Link Commerce service.
To watch is how DHL’s new Africa eShop business factors into the continent’s online-sales landscape. It could certainly serve as a new player in African e-commerce phase 2.0, now that the sector has shaken out some failures, produced an IPO, and drawn the attention of big global names.
The San Francisco-based startup Branch International, which makes small personal loans in emerging markets, has raised $170 million and announced a partnership with Visa to offer virtual, pre-paid debit cards to Branch client networks in Africa, South-Asia and Latin America.
Branch — which has 150 employees in San Francisco, Lagos, Nairobi, Mexico City and Mumbai — makes loans starting at $2 to individuals in emerging and frontier markets. The company also uses an algorithmic model to determine credit worthiness, build credit profiles and offer liquidity via mobile phones.
“We’ll use [the money] to deepen existing business in Africa. Later this year we’ll announce high-yield savings accounts…in Africa,” says Branch co-founder and chief executive Matt Flannery.
The $170 million round from Foundation Capital and its new debit card partner, Visa, will support Branch’s international expansion, which could include Brazil and Indonesia, according to Flannery. Branch launched in Mexico and India within the last year. In Africa, it offers its services in Kenya, Nigeria and Tanzania.
A potential Branch customer
The Branch-Visa partnership will allow individuals to obtain virtual Visa accounts with which to create accounts on Branch’s app. This gives Branch larger reach in countries such as Nigeria — Africa’s most populous country with 190 million people — where cards have factored more prominently than mobile money in connecting unbanked and underbanked populations to finance.
Founded in 2015, Branch started operating in Kenya, where mobile money payment products such as Safaricom’s M-Pesa (which does not require a card or bank account to use) have scaled significantly. M-Pesa now has 25 million users, according to sector stats released by the Communications Authority of Kenya. Branch has more than 3 million customers and has processed 13 million loans and disbursed more than $350 million, according to company stats.
Branch has one of the most downloaded fintech apps in Africa, per Google Play app numbers combined for Nigeria and Kenya, according to Flannery.
Already profitable, Branch International expects to reach $100 million in revenues this year, with roughly 70 percent of that generated in Africa, according to Flannery.
In addition to Visa and Foundation Capital, the $170 Series C round included participation from Branch’s existing investors Andreessen Horowitz, Trinity Ventures, Formation 8, the IFC, CreditEase and Victory Park, while adding new investors Greenspring, Foxhaven and B Capital.
Branch last raised $70 million in 2018. The company’s overall VC haul and $100 million revenue peg register as pretty big numbers for a startup focused primarily on Africa. Pan-African e-commerce startup Jumia, which also announced its NYSE IPO last month, generated $140 million in revenue (without profitability) in 2018.
Startups building financial technologies for Africa’s 1.2 billion population have gained the attention of investors. As a sector, fintech (or financial inclusion) attracted 50 percent of the estimated $1.1 billion funding to African startups in 2018, according to Partech.
Branch’s recent round and plans to add countries internationally also tracks a trend of fintech-related products growing in Africa, then expanding outward. This includes M-Pesa, which generated big numbers in Kenya before operating in 10 countries around the world. Nigerian payments startup Paga announced its pending expansion in Asia and Mexico late last year. And payment services such as Kenya’s SimbaPay have also connected to global networks like China’s WeChat.