PaySika secures pre-seed funding to supply neobank providers in francophone Africa

PaySika, a monetary expertise startup creating cell and web-based banking options for French-speaking African international locations, as we speak introduced that it has secured a €300,000 ($348,000) pre-seed funding from angel traders within the French, London, and Nigerian tech startup house.

Based in 2020 by Roger Nengwe and Stezen Bisselou, PaySika claims to be the primary business-to-customer (B2C) neobank within the area that works with a chatbot on in style messaging apps, together with Fb’s Messenger, WhatsApp, and Telegram. In response to an organization assertion, this enables customers to hold out their transactions so simple as sending an SMS. 

Regardless of the proliferation of economic providers in Africa over the previous decade, there’s been a persistently underserved hole within the francophone a part of the continent. Greater than 80% of the inhabitants within the area, or over 120 million folks, would not have entry to financial institution providers.

With business banks largely targeted on the highest 10-20% wealthiest clients, cell cash options from the area’s telcos and fintech startups have been key to extending entry to monetary providers. Presently, greater than 60% of the inhabitants use cell wallets.

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Startups at the moment are counting on the prevailing cell cash infrastructure to develop new banking options, through cell functions, for the financially excluded. PaySika is one such fintech, impressed by an expertise Nengwe had attributable to inefficient banking providers in Cameroon.

“When folks from developed international locations journey overseas for examine, they will use financial institution playing cards obtained of their house international locations to make funds. However after I arrived in France to enrol in college and needed to pay the college charges by financial institution card or cheque, I couldn’t,” he advised TechCabal

Pissed off by the disagreeable banking experiences he and lots of millennials confronted within the nation, Nengwe teamed up with Bisselou, a colleague within the French faculty who had the identical expertise, on the launch of PaySika final yr. 

“We found that lower than 20% of the inhabitants on this a part of Africa had a checking account and entry to them was significantly troublesome as banks primarily targeted on rich folks,” he recalled. “That is how PaySika was born.”

Scan-to-pay feature and virtual card on PaySika. Image credit: TechCabal.
Scan-to-pay characteristic and digital card on PaySika. Picture credit score: TechCabal.

Although but to formally launch, PaySika claims to have almost 20,000 pre-registrations – as much as 90% of them by younger folks between 18 and 35 years outdated – throughout Cameroon and Gabon. The startup plans to begin issuing digital and bodily playing cards for native and worldwide transfers when it launches totally within the first quarter of 2022, in addition to enter Benin Republic as a part of its regional play.

Figuring out properly it operates in a extremely regulated sector the place compliance and safety are key points, Nengwe reveals PaySika is creating partnerships with a number of main actors to combine safety protocols resembling KYC, AML, and MAR.

“We’ve been working so much on regulatory and safety features, for consumer identification, the battle towards all types of fraud, cash laundering, and terrorism financing,” he mentioned.

PaySika’s very first spherical of funding will enable Nengwe and his group of 4 to proceed constructing the service by recruiting new hires. As a part of the fundraising, the startup welcomes traders Benjamin Chemla, founding father of Stuart, and Damien Guermonprez of Lemonway to its strategic committee. 

Different traders that participated within the spherical embrace Charles Edouard Bouée (former CEO of Roland Berger), Didier Valet (former Deputy-CEO of Groupe Societe Common), Charlie Delingpole (CEO of ComplyAdvantage), Oliver Tilloy (Founding father of Techmind), Adedayo Amzat (Managing Director of Zedcrest Capital), and Thibault Poutrel (Founding father of Fonds de Dotation Thibault Poutrel).

How Bizao is constructing cross-border funds channels for 300 million folks in francophone Africa

Dogged by lack of readability round rules, language boundaries, and restricted networking alternatives, in line with a Briter Bridges report, francophone Africa has for a very long time been ignored by worldwide traders. An anglophone disaster in Cameroon, the place PaySika is current, is an instance of the area’s unsure enterprise local weather.

With so many untapped alternatives, nevertheless, the area is ripe for disruption. Traders know this and are more and more exhibiting curiosity within the area.

“There may be an pressing want to supply banking providers to the biggest variety of folks in French-speaking Africa at an especially low price and PaySika is doing this,” mentioned Guermonprez, the manager chairman of Lemonway, one of many largest fintech corporations in France and now investor in PaySika.

Broadly, indicators are pointing to the emergence of a budding startup scene within the area. Dwelling to among the fastest-growing economies, francophone Africa has seen a serious uptick in startup funding exercise this yr with a number of million-dollar raises recorded and the emergence of its first startup unicorn, Wave.

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