Private equity firm TPG Growth’s investment arm, The Rise Fund, recently took the lead in a $47.5 million investment in Cellulant, a digital payments provider operating primarily in Kenya and Nigeria.
This deal, announced on May 14, marks a significant milestone as the largest investment in any African fintech company to date.
It is worth mentioning that this Cellulant funding round, which also included investments from Endeavour Catalyst and Satya Capital, was the largest for an African fintech company since 2017 when Flutterwave secured over $10 million.
Cellulant, founded in 2004 by Ken Njoroge and Bolaji Akinboro, initially focused on providing mobile music and news content to consumers in Kenya and Nigeria before diversifying into mobile money services in 2005.
The company later diversified into mobile money services and obtained a mobile payment license from the Central Bank of Nigeria in 2014, empowering it to partner with the Nigerian government to supply fertilizer to farmers through a mobile wallet scheme.
When interviewed by Digital TimesNG Correspondent, business delegate Tomiwa Adetayo commented that this deal strengthens the view that digitalizing payments holds the key to driving economic growth across Africa going forward.
He elaborated on the huge potential for expansion in digital payments, describing it as “on the cusp of blooming” as more than 90% of consumer-to-consumer transactions in Nigeria currently rely on cash.
Tomiwa cited his own business as a prime example of this untapped opportunity for growth in digital forms of payment.
Ndubuisi Ekekwe, a technology expert, who also spoke at the event, told reporters that if Cellulant can raise digital payment penetration from 2% to 50% of the $301 billion market, they could earn approximately $4.5 billion in fees.
He explained this assumes an average commission rate of 3% on transaction volumes as digital payments account for a greater share of commerce.
Bolaji Akinboro, Cellulant’s CEO had mentioned on Twitter that this investment will help the company achieve its goal of becoming the top digital payments and financial services provider in Africa.
At the occasion, he noted that Cellulant will use this funding to expand existing payment products in agriculture, digital banking and online payments, and introduce new consumer products, noting this will increase access to payments for the millions remaining unbanked in Africa.
Sanmi Akinmusire, the chief commercial officer of Cellulant, reflected on the company’s journey when asked to describe how they reached this milestone.
He stated that Cellulant has come a long way since its founding in 2004 when its goal was to expand access to important services across Africa through technological solutions.
He said their commitment to their mission has been clear through their relentless focus on establishing payment options tailored to local contexts and needs for both merchants and customers in the markets they serve.
While we initially provided mobile content, we soon realised the power of mobile payments to radically change commerce throughout Africa, beginning with our launch in key markets like Kenya and Nigeria, Sanmi detailed.
Sanmi further highlighted Cellulant’s commitment to supporting various business sectors in Nigeria through technological solutions, such as agriculture, consumer goods, digital banking and online payments.
He credited the relentless efforts and dedication of their regional team for greatly achieving this across sub-regions.
For example, in the Northern region, Abel manages operations, while Nicholas leads in the South West. Particularly, he recognized Peter Kwakpovwe, National Manager of the Southern region covering South South, South East and South West, who grew weekly gross payment values across 7 states to 15 million naira.
Peter recently won an award as best performing regional manager and took on an expanded role as deputy head of the national network.
He also noted that receiving the first mobile payments license in Nigeria was a major milestone for Cellulant. It enabled the company to collaborate with the government and provide financial empowerment to farmers through partnerships, marking a key turning point in its trajectory.
This new financing validates Cellulant’s efforts to develop transparent platforms that bolster value chains. The investment will allow Cellulant to expand its solutions into new markets and extend the benefits of financial inclusion to an even greater number of Africans, just as its National Manager Peter Kwakpovwe did by growing access across Nigeria’s southern regions (South South, South East and South West).
The Rise Fund sees significant potential for impact across Africa by expanding easy-to-use and low-cost mobile banking services.
Bill McGlashan, CEO and co-founder of The Rise Fund expressed excitement about investing in African entrepreneurs like Ken and Bolaji, enabling them to grow their businesses and make a broader societal impact.
McGlashan described Cellulant as an ideal partner for The Rise Fund’s first investment in Africa.
