FinTech news in kenya category

Kwara, a Kenyan fintech digitizing credit unions (saccos), more than doubled its client base last year, and its eyeing enormous growth in the coming years after raising a $3 million seed extension, and signing an exclusive digital solutions distribution agreement with the Kenya Union of Savings & Credit Cooperatives (Kuscco), the national umbrella body representing saccos. Kwara’s product upgrades the back-office operations of credit unions helping them to shift away from tedious paper-based processes and physical branches, opening up new avenues for them to sign up new members and create novel products. Kenya’s fintech Kwara lands $4 Million in seed round from Breega, SoftBank to build neobank for credit unions The company also has a next-generation neobank app that gives members of partner credit unions access to additional services such as instant loans and third-party services such as insurance.

Kenya’s MotiSure rides on micro-payments to drive personal mobility insurance growth International startups shrug off US insurtech meltdown Why 2022 insurtech investment could surprise you Driven by a viable business model, the startup, which also has operations in Uganda and Nigeria, has entered its growth phase and is eyeing more partnerships in a bid to drive mass market insurance adoption in Africa. Through API integration Turaco’s partners like PayGo companies (M-KOPA), ride-hailing platforms (SafeBoda), fintechs and micro-finance institutions are able to bundle insurance with their core products or services. Through its B2B2C model, Turaco has created an expansive distribution channel that is enabling it to tap into a large pool of potential customers in its markets, providing insurance to a group that has never consumed it before.

Others include existing and new investors such as Adaverse, Flori Ventures, Tekedia Capital, GreenHouse Capital, ODBA, Five35 Ventures, Chrysalis Capital, Enrich Africa, Thrive Africa, Angellist Ventures and angel investors, including Rene Reinsberg, Marek Olszewski and Honey Ogundeyi. According to the CEO, Bitmama launched Changera at the intersection of blockchain payments and lifestyle, mainly targeting non-crypto-savvy people who are more comfortable using platforms with basic UI interfaces and less crypto jargon to communicate. The blockchain company will use the pre-seed to expand its operational presence, strengthen its team, consolidate its product offerings and plot market penetration across Africa while rapidly scaling new use cases for cryptocurrency within the continent, it said in a statement. Subsequently, they built a crypto exchange platform and allowed these users to access virtual assets formally and explore other use cases, including buying, selling and swapping crypto and peer-to-peer transactions.

The gap that Kenya’s embedded finance fintech Pezesha seeks to bridge as it expands into Nigeria, Rwanda and Francophone Africa following a $11 million pre-Series A equity-debt round led by Women’s World Banking Capital Partners II with participation from Verdant Frontiers Fintech Fund, cFund and Cardano blockchain builder Input Output Global (IOG).

Thus, users in Nigeria and Kenya can receive foreign payments from more than 88 countries using USD, GBP and EUR bank accounts created on the platform, convert them into their local currencies (naira and shilling) and withdraw directly to their mobile money or local bank account. With its Grey Business product, the one-year-old fintech intends to tap into the market and provide a cheaper option to send and receive local currencies within the continent, particularly for micro and small businesses. In the latest development, Grey, a fintech in this category that provides virtual international bank accounts to African freelancers and remote workers, is announcing that it has raised $2 million in seed funding. COO Aghedo said the company privately launched a business-focused product, Grey Business, to complement this consumer-facing growth and extend its product beyond remittances and person-to-person payments.

Then we have GPs of global VC funds like Ribbit Capital’s Micky Malka, Hustle Fund’s Elizabeth Yin, Sebastes Capital’s Jason Fish, a16z’s David Haber, Y Combinator’s Michael Seibel, 776’s Alexis Ohanian, Bonow Ventures’ Tilo Bonow, Precursor Ventures’ Charles Hudson, Better Tomorrow Ventures’ Sheel Mohnot, Broadhaven Ventures’ Michael Sidgmore, etc.; Web 2.0 and web3 operators; local and international HNIs; sport and entertainment icons; and PAVE Investments (the anchor LP in Microtraction Fund I), which has committed $1.5 million into the community fund. Microtraction, an early-stage venture capital firm that invests in African startups at the pre-seed stage, is announcing that it has reached the first close of its second fund, Microtraction Community Limited. The LPs in this community fund include 30+ venture-backed founders of African companies like Helicarrier’s Ire Aderinokun, Paystack’s Shola Akinlade, Cowrywise’s Razaq Ahmed, 54gene’s Francis Osifo, Paga’s Jay Alabraba, Spleet’s Tola Adesanmi, Float’s Jesse Ghansah. Microtraction is also venturing into the web3 space by setting up a community vehicle (akin to a DAO) where social tokens will be used to incentivize and gamify the experience of members who provide value-add and support to the fund and founders.

To bridge the input-access gap, iProcure, a B2B agtech, has since 2014 been connecting agricultural manufacturers and distributors to local retailers (agro-dealers), through its unique distribution infrastructure that interlinks agricultural supply chains.

It’s not only the digital platforms that want to sell insurance products, but also to help existing players be more efficient in their distribution of products, allowing them to play a role in increasing the insurance penetration level.

A day after Central Bank of Kenya (CBK), Kenya monetary authority, said that Chipper Cash and Flutterwave were not licensed to operate in the East African country, the regulator has directed all financial institutions to cease doing business with the two fintechs. The CBK’s bank supervision deputy director, Matu Mugo, in a letter, directed all regulated banks, microfinance and mortgage finance institutions to stop their partnerships with the two startups with immediate effect — dealing a blow to Flutterwave and Chipper Cash, some of Africa’s highest valued startups. Flutterwave, which is also facing money laundering allegations in Kenya, in a statement said it has been operating in the country through partnerships with regulated banks and telecoms, as it waits for a payments service provider license it applied for in 2019. The letter to the bank CEOs followed remarks by CBK’s governor, Patrick Njoroge, that the two startups are not licensed remittance or payment service providers in Kenya — one of the biggest fintech hubs in Africa.

Umba, a US-based digital bank with a focus on emerging markets, has acquired a majority shareholding of Daraja, a Kenyan deposit-taking microfinance bank, for an undisclosed amount.

Elivalat Fintech Ltd., Hupesi Solutions, Cruz Ride Auto Ltd and its director Simon Karanja Ngige, Boxtrip Travels and Tours, Bagtrip Travels Ltd. accounts, and Adguru are the entities said to have received the funds from Flutterwave, and whose accounts were also frozen.

In matured markets such as South Africa, Adenuga said BII will have an on-the-ground presence and offer its full suite of services ranging from climate finance, funding for financial inclusion, and equity and debt financing.

MFS Africa infrastructure merges fragmented and disparate payment schemes across Africa into one seamless network so individuals and businesses within mobile money ecosystems can transact across borders and currencies.

The startup, which targets motorcycle taxi (boda boda) operators, their passengers and users of other forms of public transport (hereafter commuters), is building a business around daily micro-payments for personal accident covers, with some premiums going as low as $0.1. Macharia’s interest in the sector began in 2018 when he launched a pay-per-use micro insurance product for motor vehicles — which was informed by data and patterns he had observed when he operated an automobile repair shop. The personal accident coverage for motorcycle taxi operators, which requires premiums of $0.1 day ($3 a month) includes medical expenses up to $6,000 annually, and payment for loss of income due to hospitalization following an accident, disability or death. Macharia said their approach was informed by studies showing that boda boda riders desired insurance products that went beyond asset coverage.

After spending some time in Kenya (where he was now used to paying via mobile money and rarely cash), he noticed that businesses relied heavily on manual bookkeeping and didn’t have software to record their cash and mobile money transactions.

Powered by this seed funding led by MaC Venture Capital, Identitypass plans to expand its existing infrastructure, roll out new verticals around compliance, security and data collection, and push into new African countries. These end points are government-approved IDs, such as national IDs, driver licenses, international passports, bank verification numbers (BVN), phone numbers, vehicle plate numbers, debit cards, security watchlists and tax history.

Egyptian fintech Paymob, which enables merchants to accept digital payments online and in-store, announced today it has raised $50 million in Series B funding. The Tap-on-phone product leverages contactless payments technology so that these merchants can turn their NFC-enabled smartphones — personal or commercial — into a POS by downloading a Paymob-powered app.

Pangea Trust — an East African accelerator and investment platform, diaspora remittances can be tapped to increase the amount of funding injected into startups. However, a perspective-shift is required for this to happen and that is why Pangea, working in partnership with Swedish International Development Cooperative Agency and Kenya Diaspora Alliance, has since last year organized a series of events geared towards educating those in the diaspora on why startups are good investment options.

Embedded finance product for SMEs Churpy is also set to roll out a working capital financing product targeting small to medium enterprises supplying to the enterprise customers signed up to the startup’s SaaS product. The startup is connected with some of the largest banks in the region — including Citibank, Sidian, Stanbic and NCBA — through its API.

The new regulations published Monday by the country financial regulator, the Central Bank of Kenya (CBK), also require digital lenders to get a license from the country’s monetary authority or wind down their operations by September 2022.

Fintechs in Africa continue to overshadow all other startups in funding gained Hennessy-Barrett launched 4G Capital in 2013 after a short stint as a loans manager based in Kenya for a lending corporation, an opportunity that saw him travel across Africa and gain insights on the continent lending space. Hennessy-Barrett said that 4G Capital has extended credit valued at $230 million since launch and loaned to over 1.75 million micro-businesses over the same period, recording a 90% year-on-year growth.

Antler East Africa, the Nairobi office of VC firm and venture builder Antler, has closed a $13.5 million fund to invest in early-stage tech startups in the region. Being a female-led VC team, Antler East Africa is particular about investing more in startups founded and led by women in the region, Kebede said

OkHi’s grand mission, the founder says, is to get these people who don’t have a physical address included in the global address system.

Two years later, after the platform did not make enough revenue from developers, the team chose to go vertical to what it is today, Stax, a universal money app on USSD rails for African users. The company, founded by Ben Lyon, Jess Shorland and David Kutalek, fetches all these codes from multiple accounts together into an app users can access offline, letting them perform transactions without dialling any USSD code.

The allure of microwork opportunities has grown to capture the interest of Africa youth, who stand to earn up to $7 per day, against a daily urban income rate of $4.35 urban earning average for low-income groups, according to a study conducted in Kenya by Mercy Corps Ventures (MCV), the impact investing arm of global development agency Mercy Corps.

During an interview in December last year, Mbaabu told journalist that RejaReja expects its merchants to grow to 1 million by the end of this year as it works toward digitizing the estimated 100 million small traders across sub-Saharan Africa.

Some tech insiders don’t view companies such as Zepz, Zipline or Tala as African companies — some see them as international companies headquartered in the U.S. or the U.K. with Africa as one of their markets, unlike other companies that are headquartered in Africa or both Africa and the U.S. The Big Deal tracks funding rounds from $100,000 and above from startups operating in Africa with their headquarters on the continent or HQ outside Africa but with founders from Africa. Fintechs in Africa continue to overshadow all other startups in funding gained Nigeria and South Africa are in the top two; Egypt and Kenya switch Briter doesn’t say, but it reveals more frightening stats that go almost a decade back: 3.2% of African VC total funding and 8.2% of deals have gone to all-female co-founded teams since it started keeping track in 2013.

Lami co-designs products with its underwriting partners, extending unique insurance products to their customers, and through its technological infrastructure, facilitates the distribution of insurance products via a B2B2C approach.

The firm, with offices in the countries above, is the latest big-sized Africa-focused VC fund that includes the likes of TLcom Capital which recently closed nearly half of its new $150 million fund; Novastar Ventures, a $200 million fund; and Partech Ventures, a $143 million fund.

Zanifu works with a number of manufacturers and distributors to extend the credit to these small businesses with retailers already sourcing products from the startup’s partners qualifying for the financing.

The fund invests in at least half of companies that explicitly address the energy needs of women consumers and entrepreneurs in Africa, and those offering renewable energy solutions to businesses and households.

In its bid to traverse Africa, where opportunities abound as e-commerce and alternative credit sources grow, Lipa Later will have to contend with competition from South Africa’s Payflex (which was recently acquired by Australian BNPL Zip) and PayJustNow, and Nigeria’s PayQart and Carbon Zero.

And while currently building out its buy now, pay later infrastructure (which gives businesses a chance to sell products regardless of whether customers have money or not), ThankUCash plans to add a fourth offering soon: a remittance product where merchants can sell directly to the diaspora.

The Bay Area startup wants to take a more blended solution to crypto lending with its protocol, building up capital pools and allowing fintech organizations outside the U.S. to make their case to lenders operating on the protocol and get access to funds while showing non-crypto collateral. Goldfinch is a crypto startup building a decentralized lending protocol that allows organizations to receive crypto loans without owning massive amounts of crypto already.

The continent is already a global leader in mobile money adoption, accounting for the bulk of the mobile money transactions made in 2020 — a year that saw the number of mobile money accounts rise by 43%. For instance, M-Pesa, a mobile money service by East Africa’s biggest telco, Safaricom, does not require internet connectivity for its customers to send and receive money, as well as to pay utility bills — the wallet turns subscribers’ phone numbers into a sort of proxy for bank accounts.

The Koko Club products, displayed in designated spaces within the agents’ small shops, will only be sold to registered Koko Club members. Koko Club, its new business line, is selling the products directly to consumers through the dukas (small shops) that currently serve as the company agents for its bio-ethanol cooking fuel and stoves. The shop owners (agents) are using Koko’s PoS system to sign up customers, capturing their biodata, and issuing them with an electronic card that they will use when buying products from any Koko Club shop.