African-focused fintechs raised nearly $700 million this week in funding rounds for cross-border payments company Zepz and Nigerian mobile-payments startup Opay.
Governments and central banks in those regions are investing in enhancements to the payment network infrastructure to enable higher degrees of financial inclusion, Ronak Doshi, vice president at research and consulting firm Everest Group, told Bank Automation News.
“The wave of mobile payments adoption has led to more than doubling the volume of digital payments being originated in emerging economies,” Doshi said. “Fintechs that can lower the barriers for consumers to join their platform by providing simplified onboarding process, low costs of transactions, and targeted value proposition have been really successful.”
Reducing the cost of remittance is one of the many sustainability linked goals for the United Nations Development Programme, he said. Investors who are interested in environmental, social, corporate governance-focused investments are favoring remittance firms, Doshi added.
Here are BAN’s funding highlights for this week:
Nigerian mobile-payments startup OPay is valued at $2 billion after a $400 million funding round led by Softbank Vision Fund 2 – the venture capital fund’s first time funding an African company.
OPay was founded three years ago by Zhou Yahui, a Chinese tech billionaire who once owned the Grindr app and served as the chairman and CEO of web browser Opera.
Also participating in the round were Sequoia Capital China, DragonBall Capital, the venture arm of Chinese food-delivery giant Meituan, Redpoint China, Source Code Capital, SoftBank Ventures Asia and 3W Capital.
OPay is designed to replace cash. In addition to expanding in other African countries, the fintech is setting its sights on the Middle East.
Digital cross-border payment company Zepz raised $292 million in a funding round, bringing its valuation to $5 billion.
The fintech is a rebrand of money-transfer company WorldRemit Group, which changed names after purchasing Africa-focused remittance app Sendwave for $500 million last August. The company specializes in underserved emerging markets.
The round includes new equity investors Farallon Capital, as well as backing from existing investors Leapfrog, TCV and Accel.
With the new funding, Zepz plans to invest in its technology and platform.
“The additional funds raised enable us to accelerate investment to prosecute our very sizeable growth opportunity whilst further strengthening our high-quality investor base and our mission to provide fair, fast, flexible payments for our customers,” Zepz CEO Breon Corcoran said in a press release.
In 2020, Zepz handled more than 4.5 million monthly transactions on its platform, generating almost $10 billion of gross send volumes and $338 million of revenues.
Headquartered in London, the company has regional offices in the United States, Canada, Australia, Hong Kong, Singapore, Malaysia, the Philippines, South Africa, Somaliland, Uganda, Kenya, Rwanda, Tanzania, Zimbabwe and Belgium.
The spend-management platform and corporate card Ramp reached a $3.9 billion after raising $300 million in a series C round of funding.
The additional money comes less than six months after the company raised $115 million.
Founders Fund led the series C round along with Redpoint Ventures, Thrive Capital, D1 Capital Partners, Spark Capital, Coatue Management, Iconiq, Altimeter, Stripe, Lux Capital, A* Partners, Definition Capital and other previous backers participated.
Ramp co-founder and CEO Eric Glyman told BAN that the new financing will be used to accelerate the development of its finance automation platform, as well as to build out its product, engineering and risk teams. Currently, the company has 150 employees, but it plans to grow 100% during the coming year, he said.
“Up to now we’ve been very focused on building the best product on the market that offers a delightful user experience,” Glyman said. “As a result, we’ve done relatively little on the sales and marketing side, and so we’ll be supercharging that part of the business for the first time.”
Ramp uses machine learning to identify duplicate spending and other insights into how customers can save money. It recently launched a bill payment feature that leverages artificial intelligence for invoice recognition, enabling customers to pay supplier bills in seconds, simply by emailing or dragging and dropping invoices into Ramp.
The company also announced its acquisition of Buyer, a “negotiation as a service” platform that purports to help buyers save on big-ticket purchases.
Ramp’s customer list includes Bristol Hospice, Ro, ClickUp, Marqeta, Truebill, and Walther Farms.
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