PalmPay, an African digital financial institution fintech, is in talks to lift between $50 million and $100 million in a Collection B spherical, in keeping with a number of sources conversant in the matter.
It’s unclear what valuation it hopes to get, however its final spherical, in 2021, ranked it among the many continent’s most respected startups, estimated simply shy of unicorn standing.
Whereas PalmPay declined to touch upon fundraising specifics, a spokesperson mentioned the six-year-old fintech is “in a robust monetary place and exploring development alternatives.”
The corporate, which has raised almost $140 million throughout its seed and Collection A rounds, is now worthwhile, in keeping with folks conversant in its funds.
The brand new capital, anticipated to incorporate each fairness and debt, will gas PalmPay’s growth: deepening its footprint in Nigeria, scaling its newer business-focused providing, and rolling out each merchandise in new markets throughout Africa and Asia.
Final month, PalmPay introduced it had hit 15 million day by day transactions, pushed by its 35 million registered customers. These transactions now add as much as “tens of billions of {dollars}” yearly in worth, in keeping with the corporate.
Income has additionally surged. PalmPay’s income — $64 million in 2023, in keeping with the Monetary Occasions — has greater than doubled since, folks conversant in the corporate’s financials say.
Launched in 2019, PalmPay began out in Nigeria, Africa’s most populous nation and a significant fintech hub. On the time, over half of adults within the nation have been unbanked, and conventional banks catered principally to salaried or formal-sector shoppers, usually with necessities that excluded mass-market customers.
PalmPay noticed a possibility to flip that mannequin on its head: construct a digital financial institution from scratch, however optimize it for the realities of Africa’s casual financial system. The corporate launched an app that includes instantaneous onboarding, zero switch charges, and a rising suite of providers (together with credit score, financial savings, insurance coverage, and invoice funds) all tailor-made to the wants of underbanked customers and small companies.
Crucially, PalmPay didn’t rely solely on digital acquisition. The fintech constructed an unlimited on-the-ground community of over 1 million small companies and agent retailers, who now serve greater than 10 million clients month-to-month by means of the PalmPay Enterprise app and point-of-sale units (for cash-in, cash-out providers).
Different main fintechs within the nation, together with OPay, Moniepoint, and Paga, have additionally adopted the hybrid mannequin, combining digital apps with bodily touchpoints.
PalmPay claims to course of extra transactions than any conventional financial institution in Nigeria, and 25% of its customers report that it was their first-ever monetary account. For credit score merchandise, provided in partnership with licensed lenders, that quantity jumps to 60% amongst debtors, it claims.
A part of PalmPay’s sturdy distribution and advertising benefit stems from its partnership with Transsion, the Chinese language telephone maker that dominates smartphone gross sales in Africa, with a market share of over 40% throughout its manufacturers (Tecno and Infinix).
By the partnership, PalmPay pre-installs its app on choose financed smartphones, serving to drive person acquisition and engagement.
Having established itself as probably the most broadly used fintech apps within the nation, PalmPay is now getting ready to copy its mannequin in new markets overseas.
The neobanking platform has expanded to Tanzania and Bangladesh (its first foray exterior Africa), the place PalmPay is getting into with gadget financing and client credit score as wedges earlier than layering in additional providers. (Different African digital banks, together with FairMoney, MNT-Halan and TymeBank, have expanded their monetary providers into Asia with various levels of success.)
The corporate additionally plans to introduce gadget financing in Nigeria, its spokesperson confirmed.
Whereas Transsion, which led PalmPay’s seed spherical, stays a strategic associate, the corporate’s spokesperson says the fintech is actively exploring collaborations with extra authentic gear producers (OEMs).
GIC (Singapore’s sovereign wealth fund) and Mediatek, one of many world’s largest cell chipset makers, are a few of its different buyers.
On the business-facing aspect, PalmPay presents cross-border funds for retailers who need to ship and acquire funds throughout Africa by way of a single API, a recurring ache level (even with the promise of stablecoins). This newly launched enterprise function, at present dwell in Nigeria, Kenya and Tanzania (with South Africa within the pipeline), already processes “lots of of hundreds of thousands of {dollars} month-to-month,” the corporate’s spokesperson confirmed.
