Led by CardinalStone Capital Advisers with participation
from V8 Capital, Lateral Investment Partners, Constant Capital, and ItannaCapital 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.
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.
Speaking on the fundraise, Appzone’s Co-Founder and CEO Obi
Emetarom (pictured above) 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 the 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.”
Currently, Appzone’s clients 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.