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Monday 27th March, 2023

Fintech

Appzone Secures $10mn Series A Funding

CardinalStone Capital Advisers lead funding to build “the Operating System for Africa’s financial services Industry”

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Obi Emetarom, Appzone’s Co-Founder/CEO

Appzone, the Pan-African fintech software provider building proprietary solutions for the continent’s banking and payments industries, has Monday announced the close of its $10mn Series A round.

Led by CardinalStone Capital Advisers with participation from V8 Capital, Lateral Investment Partners, Constant Capital, and Itanna Capital Ventures, the new round will bolster investment in Appzone’s core technologies and kick off a wave of new country expansions in a drive to build out a financial operating system intended to completely digitise and automate the delivery of financial services on the continent.

Launched in 2008, Appzone delivers best-in-class products for digital core banking and interbank transaction processing with clients across seven African countries including high-profile names like Access Bank, GT Bank and Zenith Bank.

Since its inception, the company, also an alumnus of the Google launchpad accelerator, has led Africa’s fintech sector through radical innovation that resulted in a number of global firsts from the continent, including the world’s first decentralised payment processing network, the first core banking and omni-channel software on the cloud and the first multi-bank direct debit service based on single global mandates.

To date, the company’s platforms have served 18 commercial banks and over 450 microfinance banks, amassing a yearly transaction value and yearly loan disbursement of $2bn and $300mn respectively.

As Africa’s traditional banks and fintech startups grapple with the increasing threat from telco companies and big tech players, Appzone’s products effectively and affordably equip them to deal with the sector’s most pressing challenges including legacy cost structures and a major lack of operational efficiency.

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Currently, due to a severe dearth of high-quality localised solutions that address these problems, traditional and challenger banks in Africa are limited to using foreign technology solutions tailored for Western markets – many of which are plagued with the huge stumbling blocks of prohibitive pricing, insufficient flexibility to innovate and a lack of local tech support.

Appzone founders

Appzone’s Co-Founder and CEO, Obi Emetarom says: “We’re excited not only to be securing a significant capital raise but also welcoming on board some strategic investors whose support will be key to our growth journey.

“Today’s news allows us to scale Appzone’s products and services rapidly. For the last 12 years, we’ve worked in stealth mode, building the really complex infrastructure to power the continent’s growing digital financial services space and forging partnerships with the continent’s biggest financial institutions.

“In terms of next steps, we are now looking to hire from Africa’s top 1% to grow our team of elite talent who have proven themselves to be true  African builders; the brightest senior software engineers and domain experts, doing the incredibly hard work of building the backbone and next-generation infrastructure for digital financial services at a level beyond world-class.

“We are seeking out gifted and audacious engineering and entrepreneurial minds, hungry to accelerate economic prosperity and tackle challenging technology with us. We are not just trying to bring African fintech on-par with the rest of the world – we exist to make our financial sector the most innovative and technologically advanced on the globe through solutions built for Africa by Africans.”

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Appzone’s clients currently spread across Nigeria, Ghana, Gambia, DRC (Democratic Republic of Congo), Tanzania, Senegal and Guinea and to date, the company has raised $15mn in equity funding with previous investors including Lateral Capital, GreenHouse Capital, Timon Capital and Itanna.

In 2018, the company obtained official approval from the Central Bank of Nigeria to operate as a Payment Solution Service Provider (PSSP) and has been the recipient of a number of industry awards including the Frost & Sullivan Award, NAMB (National Association of Microfinance Banks) and CeBIH (Committee of eBusiness Industry Heads) awards.

Yomi Jemibewon, Co-Founder and Managing Director of Cardinal Stone Capital Advisers said: “Our investment in Appzone is further proof of Africa’s potential as the future hub of world-class technology.

“Appzone is building a disruptive FinTech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure and Software as a Service.

“The impact of Appzone’s work is multifold – the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best in class employment opportunities.”

Despite its challenges, Africa’s banking sector is projected to reach a total market valuation of $129bn by 2022 according to McKinsey & Co.

As the industry struggles to serve Africa’s huge unbanked population, there has been a growing influx of fintech platforms filling the gap.

In recent years, these startups have attracted major interest from investors across the globe and in 2020, the sector accounted for over a third of the total $1.3bn in funding secured by African tech startups.

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Fintech

Flutterwave Receives Two Additional Licenses In Rwanda

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Flutterwave, Africa’s payments technology company, said it has received its Electronic Money Issuer and Remittance Licenses from the National Bank of Rwanda, which will consequently help the company expand its operations in East Africa.

With these new licenses, in addition to being a Payment Service Provider, Flutterwave can offer money deposit and withdrawal, electronic funds transfer, as well as inbound and outbound remittance services to the 13.46 million people living and working in Rwanda.

According to Rwanda’s National Institute of Statistics, Micro, Small & Medium Enterprises (MSMEs) in Rwanda account for about 97% of businesses and contribute almost 55% to the total GDP, making MSMEs critical to job creation and the economic growth of the country.

Flutterwave will be deploying a range of products in Rwanda, including Send by Flutterwave, its cross-border money transfer solution, Flutterwave for Business and its suite of products, including Store, payment links, invoices and checkout to help individuals and businesses in Rwanda make the most of the booming eCommerce market.

Olugbenga ‘GB’ Agboola, Founder and CEO of Flutterwave, commented on the news, “From our first transaction to over 400 million now, we’ve remained committed to our vision of connecting all parts of Africa through payments and connecting Africa to the world.

“As a country well known for fostering innovation and promoting the use of digital technology, Rwanda has always been important to our expansion plans in East Africa. We are delighted for the vote of confidence in being granted these licenses.

“With them, we will leverage our extensive global reach and continuous growth in emerging markets to provide MSMEs in Rwanda with the tools they need to stimulate the economy, facilitate seamless cross-border transactions for Rwandans and support the expansion drive of global and Rwandan businesses.”

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Leah Uwiroheye, Flutterwave’s East Africa Regional Lead, Regulatory and Government Affairs, said, “This is a great achievement for the company. As Rwanda continues executing important reforms to enhance the ease of doing business and implementing its Fintech Strategy 2022-2027, Flutterwave keeps contributing towards achieving a cashless economy by innovating and employing digital technology to support businesses and stimulate the economic growth of countries where we operate.

“The licenses will enable us to provide safe, secure, and seamless payment services for individuals and businesses in Rwanda. This is definitely a starting point for Flutterwave as we continue to expand across East Africa.”

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Fintech

Flutterwave Granted Regulatory Approval To Operate In Egypt

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Flutterwave has obtained licenses to operate in Egypt as a payment service provider, thus allowing the company to start collecting and making local and international payments in the country.

These licenses will allow Flutterwave to deploy Flutterwave for Business suite of products including store, payment links, invoices, and checkout in Egypt.

Flutterwave is one of Africa’s leading fintechs, often cited as the most valuable startup in the region, and has been on an expansion drive lately, setting up operations in various markets.

The firm recently entered the Ethiopian market, enabling users to send money to the country via cash pick-up centres.

Ethiopians in Diaspora can send money home and have the receivers pick up the cash in Dashen bank branches, Amole Agents and Ethiopian postal service offices.

“Our vision is to connect all parts of Africa through payments and connect Africa to the world. This way, it is easier for multinationals expanding into Africa to do so.

“This achievement is yet another step in that direction,” said Flutterwave CEO and founder, Olugbenga GB Agboola.

Aalaa Gamal, Flutterwave’s Regional Manager said, “This is the beginning of other strategic wins in the North Africa and Middle East regions.”

Flutterwave recently announced a partnership with Multichoice Africa to bring back the popular reality TV show, Big Brother Titans.

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Kenya Govt Drops Fraud Charges Against Flutterwave

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Bloomberg is reporting that the Kenyan government has dropped charges of financial impropriety against Flutterwave Inc.

This comes about seven months after the High Court froze the company’s money held in different bank accounts over allegations of money laundering.

The money included KSh5.3 billion held at Guaranty Trust Bank (GTB), Sh1.4 billion at Equity bank, and other millions at Ecobank.

In August 2021, a further Sh400.6 million belonging to the company held at UBA, one account at Access Bank and 19 M-Pesa Paybill numbers were also frozen.

The Asset Recovery Agency (ARA) had obtained orders to freeze the accounts, saying it was investigating the movement of billions of shillings transacted through Flutterwave.

Flutterwave had also been accused of operating in the country without a valid license by Central Bank of Kenya (CBK) Governor Patrick Njoroge.

The fintech, however, said that it applied for a license to operate as a payment service provider in 2019 but it’s yet to receive it from the CBK.

The withdrawal of the charges is a big relief for Flutterwave which is preparing for an initial public offering on the Nasdaq stock exchange.

The Nigerian startup is among the leading fintechs in Africa.

The company was founded in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya and is headquartered in San Francisco, California.

It has operations in Nigeria, Kenya, Ghana, and South Africa, and was last valued at more than $3 billion and had raised more than $450 Million in VC Funding.

It’s not clear if the withdrawal of the case also means Flutterwave will now continue operating in the country.

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