Egyptian fintech, MoneyFellows, has raised $4 million Series A funding

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Welcome to today’s edition of TC Daily!

In today’s digest: Why are Nigeria’s biggest payments companies interested in the e-commerce business, Egyptian fintech raises $4 million, and Platform Capital invests in SafeRoom.

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Things always look ephemeral until one connects the dots. Between March and April, three of Nigeria’s biggest payments companies launched e-commerce services. OPay created OMall and OTrade, Flutterwave announced Flutterwave Store, and SystemSpecs’s Remita unveiled Paylink. Meanwhile, GTBank, one of Nigeria’s biggest banks, is planning to double down on its ecommerce superapp, Habari.

Why have these companies developed alternative e-commerce options?

Between 2012 and 2017, Jumia and Konga burned millions of dollars trying
to open up the Nigerian e-commerce market. Working with research that predicted the rise of the African middle class, these companies considered e-commerce winner-takes-all. They tried it all but came up empty. Nigeria went into a recession and the expected middle class growth never happened.

So why are payment companies interested in e-commerce now? What new opportunities did they find?

After studying the market, we arrived at a thesis. While Nigeria’s economy is still below par, the composition of the e-commerce market – payments, logistics, and merchant expectations – has changed.
Merchants want visibility, so they are increasingly using social media platforms like Instagram to attract customers. Payment collection is easier today and more Nigerians are comfortable with digital payments. To deliver items, merchants are using third-party logistics services like MAX, Gokada and GIG Logistics.

Payments companies have realised this. They are trying to plug into this merchant behaviour by giving them customizable online stores while outsourcing logistics to third-party providers. The pace at which they’re doing this may have been influenced by Facebook’s growing e-commerce and payments ambitions.

This was our thesis. But as we published the article yesterday, Paystack, another payment company, announced its own e-commerce offering. Paystack Commerce may have confirmed our theory.

In South African, there are speculations that the government is planning to sell its stake in Telkom SA, the mobile network company. In January, a Bloomberg
said the Cyril Ramaphosa-led government was planning to sell some assets to fund distressed state-owned enterprises, especially the South African Airways. The government’s prime properties in Cape Town and its 40.5% stake in Telkom are top assets for disposal, Bloomberg reported. Six months later, the chatter is back. The pandemic has added new revenue challenges for the government, forcing it to consider alternative ways to raise funds. Speculators believe the government may now, perhaps as a matter of urgency, have to sell its Telkom stake. A recent rise in Telkom’s share price is fuelling this assumption. The country’s Minister of Finance, Tito Mboweni, is expected to give a budget speech today (Wednesday) and could possibly announce the government’s asset-disposal plans.

Egyptian fintech, MoneyFellows, has raised $4 million Series A funding. The round was led by Partech Africa and Sawari Ventures. Founded in 2016, MoneyFellows is a contributory savings and loans schemes that now has over 150,000 users. With the latest fundraise, the startup has now raised at least $5 million since 2016. Alexander Onukwue has more information on this story.

South Africam fintech, Paymenow has raised ZAR4 million (US$230,000) seed funding from ViaMedia. Paymenow is a lending platform that allows employees to request salary advances at any point in a month. Once integrated into their employer’s payroll system, the platform allows them to borrow a percentage of their salaries. With the new funding, the company said it wants to scale locally and across Africa and Latin America.


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Three African startups have been selected among six startups to join the Catalyst Fund’s latest cohorts. They include Nigeria’s WellaHealth and Flex Finance, and South Africa’s PayMeNow. Each company will receive equity-free £80,000 in grants and venture support while building their solution. TechCabal’s
Alexander Onukwue
has more on this.

Platform Capital, a venture firm, has announced an undisclosed investment in SafeRoom, a Mexico-based mobile messaging service. An enterprise SaaS product, SafeRoom provides military-grade encryption and data control for business employee communication. The instant messaging service includes features such as remote data wipe, collaboration, corporate identity, among a few others. The startup is backed by a number of investors including Will Bunker, Founder of and John Battelle, Founding Editor of Wired magazine. With the new funding, SafeRoom is looking to scale up and expand to new markets including Africa and other Latin American


South Africa is witnessing a surge in ecommerce transactions as the country relaxed some lockdown restrictions, MyBroadBand reported. Between March and April, the country was on lockdown and only essential service providers were allowed to operate. Ecommerce platforms were seriously restricted and couldn’t sell products outside essentials. But with the easing of ecommerce restrictions, a
boom has followed. An unnamed source at Takealot, one of the country’s biggest ecommerce platforms, said sales have doubled. The company is now generating nearly 1 rand a month in sales. Without disclosing deeper figures, South African payment, PayGate and PayFast, say they are witnessing unprecedented week-on-week growth. PayGate expects 2020 growth to be 40% higher than the previous year.


Uzoma Dozie, the former CEO of Nigeria’s Diamond Bank, now runs a startup. Last year, his bank merged with Access Bank, creating one of Nigeria’s largest bank in terms of deposits. The 51-year-old Dozie has remained in the finance sector and recently launched his new startup Sparkle a digital banking app. In this interview with Techpoint’s Adewale Yusuf, he shares his life experience and plans
for the new startup.

That’s all for today,

See you tomorrow.
– Abubakar

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