Investor Updates: Julaya gets $5m for business banking in francophone Africa

Julaya gets $5m for business banking in francophone Africa

Highlights

• Ivorian payments-led fintech startup Julaya has extended its pre-Series A round by $5 million, taking the total amount raised in the financing round to $7 million.
• The company facilitates B2B payments for businesses in Francophone West Africa, mainly via mobile money channels. Brands such as Jumia and Sendy are some of Julaya’s clients.
• Proceeds from this financing round will assist the fintech in further expansion plans across Francophone West Africa (particularly Benin, Togo, and Burkina Faso), hire talent, and boost product development including the launch of a credit product targeting 200,000 SMEs in the region.

Source: TechCrunch

Our Takeaway

Across Africa, merchant acquisition is proving to be the “new” scramble for digital payment and banking services on the continent. Offline and informal merchants exist all over Africa and account for up to 90% of businesses on the continent. As such, there’s a significantly large market of African businesses waiting to be tapped by technology startups, with the potential to make attractive returns. In July 2021, Julaya’s CEO said the fintech was processing more than $1.5 million monthly. Those numbers have reportedly increased fivefold to more than $7.5 million with revenues seeing identical growth at over 500% year-on-year.

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Ghana’s SecondSTAX comes out of stealth with $1.6m funding

Highlights

• Ghanaian fintech SecondSTAX (Secondary Securities Trading and Aggregation eXchange) has raised $1.6 million in pre-seed funding from private investors and venture capital firms, including LoftyInc Capital, Orbit54, and STEMeIn.
• The platform, which will allow broker-dealers, asset managers, pension funds, and institutional investors to access markets outside their own country, has also been launched to the public.
• The funding will see SecondSTAX launch in more countries, after Kenya and Ghana, by the end of the year and perform the activities that come with that, especially regarding regulatory and licensing issues.

Source: TechCrunch

Our Takeaway

African capital markets are fragmented, as various stock exchanges within the continent are often inaccessible to investors outside their home countries. Not only does this limit investors’ access to high-growth securities, but it also curtails access to capital that has grown significantly over the past couple of years; major exchanges in the region have raised over $80 billion in equity capital markets and $240 billion in debt capital markets. SecondSTAX is moving to play in a largely traditional, ignored market, eyeing capital markets in Ghana, Kenya, Nigeria, South Africa, Morocco, and Egypt with its solution.

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Tanzanian government scraps mobile money transfer fees

Highlights

• Three months after slashing its mobile money (MOMO) transaction levy by 43%, Tanzania has scrapped the MOMO transfer levy starting October 1, 2022.
• Aside from MOMO transfers, the government will also scrap the fee for bank transfers and also waive the transaction fee on withdrawal of cash through bank agents and ATMs for values not exceeding Tsh30,000 ($12.81), according to the Finance and Planning Minister, Mwigulu Nchemba.
• To cover the revenue it will forego from the canceled levies, the government plans to reduce its expenditure by cutting spending on things such as conferences, training, refreshments, and trips.

Source: TheEastAfrican

Our Takeaway

As mobile money uptake in Africa surges—the continent accounted for 70% of the world’s $1 trillion MOMO value last year, with transactions up 39% to $701.4 billion from $495 billion in 2020 while volume jumped 23% to 36.7 billion from 27.5 billion —it is clear that the future of its banking is mobile. But this possibility faces significant challenges, including taxation by governments. Ghana, Cameroon, Uganda, and Zimbabwe all have MOMO taxes while Kenya, Nigeria, South Africa, Egypt, and Mauritius are other African countries exploring similar plans. Tanzania’s move is thus a marked reversal from what’s playing out in its counterpart nations.