👨🏿‍🚀TechCabal Daily – Interswitch raises $110 million

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13 MAY, 2022

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TGIF 🔥

WhatsApp reactions have finally rolled out. 

The initial announcement was made in March, and now WhatsApp users—on Android and iOS—can select 1 of 6 emojis to react to messages. 


In other updates, Twitter announced a pretty interesting policy change on Wednesday: it’s now limiting the visibility of tweets from copycats copypastas in a bid to reduce spam and duplicative content. 

Side-bar: Copypasta is internet slang that refers to duplicating content from its original source and posting it across social media. It’s those jokes you’ve heard over and over again or the influencer tweets that have the same sentences and hashtags. 

According to Twitter, copypasta can be used to promote and suppress information and even manipulate Twitter Trends. 👀 To promote healthy public discourse, Twitter will limit the reach of these duplicative tweets by downranking them in replies, not amplifying them on Twitter Search or Trends, and excluding them from recommendations. 

This means more work for content creators, social media managers, and micro-influencers. Getting on the Trends list will now take a whole lot more than a “Wow, this product changed my life, just check out #ThisProduct.”

In today’s edition

  • Quick Fire 🔥
  • M-PESA goes international
  • Interswitch raises $110 million
  • TC Insights: Funding Tracker
  • Event Recap: Digital Identity Matters
  • Job opportunities

CRYPTO MARKET


* Data as of 11:40 PM WAT, May 12, 2022.

QUICK FIRE 🔥 WITH TSAKANE NGOEPE

Tsakane Ngoepe is the Director of Strategic Finance at M-KOPA. Before M-KOPA, Tsakane was a portfolio manager at AHL Ventures where she was responsible for deal origination, structuring, and portfolio management. Prior to AHL, Tsakane was an impact investment analyst at the Bertha Centre for Social Innovation and Entrepreneurship, where she focused on researching and testing innovative financing instruments and projects.


Explain your job to a five-year-old

I use numbers to tell stories about what the future could look like and convince people to “give” us money to build that future.

What’s something you wish you knew earlier in your career/life?

In choosing a role, beyond the choice of the company, your manager and colleagues will have the biggest influence on your experience and growth. Take your time getting to know them before deciding to join the company.

What’s the most promising thing about tech in Africa?

All the talent that is now working in this ecosystem. There is a lot of potential in the ecosystem and, beyond capital, we need smart, hard-working people to unlock this potential. At M-KOPA, we are always looking for super talented employees to join our mission of making financing for everyday essentials accessible to everyone. 

What’s one misconception businesses/startups have about investment/investing? 

When an investor says no, always ask what things they would have liked to see to say yes. This is a great way to understand if it is a no or a not-now and what would have to be different for them to say yes. You can try to tease out the things that are important but not written on anyone’s About page 😊

If you could pivot to any other tech job, which would it be and why?

I’m a big nerd for numbers and using numbers to make sense of things or connect the dots. So, probably something in analytics or data science. If only my Python skills were as kick-ass as my financial modelling skills 😊

What (singular) achievement are you most proud of?

I think, by now, I’ve probably led or played a significant role in fundraising and investment transactions in the hundreds of millions of dollars across all debt, equity, and everything in-between, and almost nothing is like what I learnt in finance textbooks in uni. I couldn’t have dreamt of having this depth and diversity of experience at 28!

What’s something you love doing that you’re terrible at. And what’s something you really do not like doing that you’re great at?

Okay, I’ll let this cat out of the bag. I secretly write a lot of poetry, but it is terrible! I love doing most of the things I am great at because I get a lot of joy from mastery.

What do you think about Web3

Super interesting for me personally in 2 ways. First, NFTs as alternative community-driven and funded approaches to building interesting stories, media, and gaming experiences. My faves so far that I own are “The Wanderers” and “Yolo Dice”. DeFi companies that are expanding access to capital for emerging market companies – tackling some of the problems crowdfunding tried to solve. 

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INTERSWITCH RAISES $110 MILLION


Interswitch has received $110 million in joint investment from LeapFrog investments and Tiana Africa Capital, according to a statement released by the two private investment companies on Wednesday. The digital payment company is Africa’s second unicorn, and its latest investment will help it to scale digital payment services across the continent. 

Founded in 2002, Interswitch disrupted Nigeria’s cash-driven economy by introducing electronic payments and switching services. When Interswitch entered Nigeria’s financial scene, it was estimated that there were less than 200,000 Nigerians with internet access, with many still adjusting to their newly acquired mobile phones. Despite the existence of other e-payment services that had received operating licenses 6 years before Interswitch was established, Interswitch became Nigeria’s first e-payment service to be connected to all banks. Today, it provides payment rails for Nigeria’s online banking system and is known for its consumer-facing products: Quickteller, an online consumer services platform for bill payments and airtime purchases, and Verve, its pan-African debit card scheme, which is available in 185 countries via its partnership with Discover. 

Interswitch’s last funding round was in 2019 when VISA acquired a 20% stake, valued at $200 million, and helped it become Africa’s second unicorn. Even then, its products: Verve and Quickteller, were already selling in 23 African countries and had a physical presence in Gambia, Uganda and Kenya. Today, at a $1 billion valuation, Interswitch is touted as one of Africa’s biggest electronic payments and infrastructure companies.

Amidst conversations about the proliferation of fintech companies in Nigeria and Africa, Interswitch is strengthening its pan-African expansion strategy which includes acquiring new customers and expanding financial inclusion on the continent. At last count, Africa had 350 million unbanked adults and recent data from the Global System for Mobile Communications (GSMA) shows that 70% of the world’s $1 trillion mobile money market is in Africa. It is no longer news that the future of banking is in Africa; Interswitch, a pioneer in the African mobile money space, doesn’t want to be left behind.

“The evolution of fintech in Nigeria and the broader sub-Saharan region has been driven by the need to solve challenges and barriers that exist within the traditional financial system,” Interswitch Group CEO Mitchell Elegbe said in a statement. “Interswitch was born from the need to develop solutions that match the unique needs of local customers and merchants.”

Reiterating Interswitch’s plans to replicate its financial disruption in other African countries, LeapFrog Investments’ partner and head of Africa financial services, Karima Ola, said that company “has been disrupting the cash economy, driving digital payments and promoting equitable financial inclusion in Nigeria for two decades. This investment by LeapFrog affirms the formidable talent at Interswitch, and how well-placed it is to seize the significant opportunity in Africa’s evolving digital payments landscape.”

M-PESA GOES INTERNATIONAL


Do you remember the Safaricom-Visa Partnership that led to the development of M-PESA visa safari card? Well, another card has dropped from that same partnership. This time it’s a virtual card and will enable MPESA customers to receive or send payment to almost anyone in the world. The virtual cards are aptly called M-PESA Global Pay cards.

The 15-year-old M-PESA has crossed the 30 million customer mark. Its super app has been downloaded over 5.3 million times and has more than 1 million active customers while the M-PESA Business App has been downloaded more than 462,000 times. Reportedly, the carrier has 11 million active Lipa Na M-PESA customers and a network of over 3.2 million businesses that accept M-PESA payments.

 Why this card is important

Global payment gateways like PayPal have left African customers wanting hence many M-PESA users may have been looking forward to this virtual card offering. Reportedly, millions of users in the country use M-PESA for sending and receiving cash, accessing overdrafts (Fuliza), and accessing loans and savings (KCB M-PESA and M-Shwari) and other bill payments options. 

Now, M-PESA customers will also be able to send and receive money to and from almost any individual across the world, directly into their bank accounts, for pick up at more than 500,000 Western Union agent locations or through partners like World Remit and Homesend.

Financial inclusion for the win

This virtual card is one of the seamless interoperable financial services and products that the partnership between Safaricom and Visa hoped to produce when they entered a partnership in April 2020.

A similar strategic partnership exists between Mastercard and MTN’s mobile money unit, MoMo. It has also yielded a similar global payment solution. Mastercard’s virtual payment solution linked to MoMo wallets also allows holders to access a global digital payment experience on websites and mobile applications whether or not the customer has a bank account. These partnerships are progressive benchmarks in Africa’s journey towards financial inclusion.

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TC INSIGHTS: FUNDING TRACKER


This week, African payments unicorn Interswitch secured a $110 million joint investment from LeapFrog Investments and Tana Africa Capital to scale its digital payment services across the continent.

Here are the other deals of the week:

  • MARA, a pan-African crypto exchange platform completed a seed round of $23 million from multiple investors including Coinbase Ventures, Alameda Research (FTX), and Distributed Global. Other VCs in the round were TQ Ventures, DIGITAL, Nexo, Huobi Ventures, Day One Ventures, Infinite Capital, and DAO Jones (investment DAO backed by Mike Shinoda, Steve Aoki, and Disclosure)
  • Egyptian fintech startup Paymob raised $50m in a Series B round led by PayPal Ventures, Kora Capital, and Clay Point. Other investors include A15, FMO, and Global Ventures.
  • Congo-based Web3 startup Jambo has raised $30 million in a Series A funding round led by Paradigm Investment Group. Additional participation in the round comes from ParaFi Capital, Pantera Capital, Delphi Ventures, Kingsway Capital, Gemini Frontier Fund, BH Digital, Graticule Asset Management Asia, Shima Capital, and Morningstar Ventures, among others. 
  • Kaltani, a Nigerian clean-tech startup, secured $4 million in seed funding to expand its recycling operations across the country.
  • Identitypass, an identity verification startup based in Nigeria raised $2.8 million in a funding round led by MaC Venture Capital. Y Combinator, Soma Capital, True Capital Fund and Sherwani Capital also participated in the funding round.

That’s it for this week!

Follow us on Twitter, Instagram, and LinkedIn for more updates.

EVENT RECAP: DIGITAL IDENTITY MATTERS


Do you think Africa is a great market for open finance initiatives? 

On April 22, we held the 4th edition of Digital Identity Matters. At the event, we talked about how we can build a robust and reliable open finance infrastructure for Africa by leveraging digital identity. Our speakers were Ope Adeoye, founder and CEO, OnePipe; Adedeji Olowe, founder and CEO, Lendsqr, and trustee, Open Banking Nigeria; and Esigie Aguele, co-founder and CEO, VerifyMe. Money Africa’s CEO, Tosin Olaseinde, moderated the session. 

Each speaker shared important perspectives on why digital identity is crucial for open finance in Africa and why open finance is, in itself, critical to Africa’s financial future. They talked about the importance of standardising digital identity, how we can drive digital identity in rural areas with limited digital infrastructure, what makes Africa a great market for open finance, and the need for collaboration among industry players—among other salient points. 

Want to watch the full conversation? It’s right here

Digital Identity Matters is brought to you by VerifyMe Nigeria in partnership with TechCabal.

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JOB OPPORTUNITIES


Every week, we share job opportunities in the African ecosystem.

There are more opportunities here. If you’d like to share a job opening or an opportunity, please fill this form.

What else we’re reading

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