TeamApt will use its new funding round to deliver digital banking to unbanked people – TechCrunch
A lot has changed since we last covered Nigerian fintech startup TeamApt two years ago.. At the time, the company had fair closed $ 5.5 million Series A funding round from a single VC – Quantum Capital Partners, a company owned by Zenith Bank billionaire Jim Ovia.
TeamApt has quite a story. CEO Tosin Eniolorunda started the company in 2015 after leaving Interswitch. He was one-on-one with the billion dollar company when TeamApt was licensed to operate as a payment switch providing enterprise solutions to banks nationwide..
TeamApt started with revenue generated per project. In 2017, the company, which optimized core banking back-office operations, served 26 financial institutions and processed $ 160 million in monthly transactions without raising a dime.. A year later, TeamApt began launching direct consumer and business products aimed at fostering financial inclusion in the country..
Moneytor has been a digital banking service for financial institutions to track transactions with web and mobile interfaces; Monnify, an enterprise software suite for managing small businesses, and AptPay, a push payment infrastructure to centralize the services used on mobile banking applications. And while tThe products have been successful in themselves, it is Moniepoint, an agency banking platform launched months after Series A, has become instant success because it interfaces with the public.
In developed markets where banking networks are sophisticated and have a broad scope, the concept of agency banking is foreign. But in developing markets like Nigeria, it is necessary because the bank-to-population ratio in Nigeria is low. According to reports, there are 4.3 branches per 100,000 inhabitants compared to the global average of 11.7 branches.
Agency banking serves as an alternative distribution strategy for traditional retail banking by using authorized staff who act as agent to extend the reach of the branch network. For many Nigerians, branch banking is a lifeline of financial access and one of the most viable options for accessing the financial services they need..
Moniepoint Agents use mobile applications and point-of-sale terminals to provide these customers with access to financial services such as cash withdrawal, cash deposit, funds transfer, purchase of airtime and payment of bills. In less than two years, Moniepoint claims to represent 74% of agency banking transactions in Nigeria. The platform also processes approximately 68 million transactions worth more than $ 3.5 billion per month through 100,000 agents and 14 million customers.. When Monnify transactions are added, TeamApt said it has processed $ 17.5 billion in the past 12 months.
But despite the apparent success, TeamApt is in balance to add digital banking to Moniepoint’s dominant branch banking game. “What is the reason behind this? With many players, was the branch’s banking space getting too crowded for Moniepoint not to be able to to acquire more market share? âI ask Eniolorunda.
âThere is still room for growth in the agency space. We can actually grow more and take more share as more agents continue to enter the market and consumers embrace agency networks and point-of-sale networks.. So the reason we’re trying to do this is for two reasons – a mission and a business reason, âhe replied.
The best-known digital banks in Nigeria reach out to already banked customers, neglecting unbanked or underbanked consumers that banks don’t serve. Eniolorunda’s ‘reason for mission’ is to provide them with financial services by launching a digital bank. The business reason? “We want to strike a balance between banking and digital approaches to truly serve the next billion Africans. The reason we can do this is because we have demonstrated our pull in Nigeria to become the largest agency network. fair within the two-year period, âadded the CEO.
Judging from the transactions done on Moniepoint and given that existing digital banks capture the same customers as large commercial banks, TeamApt has a great opportunity if it can convert some of its users offline to online.. Of course, this strategy is not new in itself. What is it like another digital bank targeting the unbanked, Bankly adopted it although it has a different business model. However, the good news is that sif one of these platforms has significant success, other platforms could broadly adopt the approach and goes a long way in providing digital banking services to the unbanked.
To test this strategy on a large scale, TeamApt secured an undisclosed Series B investment. Two months ago, Dutch entrepreneurial development bank FMO said it has invested $ 2 million in the startup. TeamApt has confirmed the company’s participation in TechCrunch and also said the money is part of its Series B tour.
Other investors who participated included lead investor Novastar Ventures, which controls a $ 200 million Pan-African fund; Global Ventures, CDC Group, Soma Capital and pan-African venture capital firms Kepple Africa and Oui Capital, based in Dubai, alongside some local angel investors.
TeamApt, while continuing its business switching activity, will seek to expand its offerings directly to clients and micro-SMEs with Moniepoint. In addition, and ssubject to regulatory approval, agency and digital banking platforms will exist under Moniepoint.
Brian Waswani Odhiambo, Head of West Africa at Novastar Ventures, said the venture capital firm backed TeamApt after seeing how quickly its branch network has become the number one operator in Nigeria.. The company, “by providing TeamApt sufficient capital to continue its new phase of growth â, there is no doubt that the company will do the same with its digital banking platform.
In the past month, TeamApt has announced that it is currently in the process of closing another round. Eniolorunda has confirmed to TechCrunch it will be a C Series. While it’s in progress TeamApt will develop expansion plans in other African countries with strong economies in each region: center, east, north and south. The company is also keen to make a few acquisitions along the way to exploit significant opportunities to leverage offline technology and distribution to deliver financial services to the African mass market..