Investor Updates: May 12 2022 - Pan-African fintech Interswitch raises $110m investment

🌍 Pan-African fintech Interswitch raises $110m investment

Highlights

• Nigeria-based payments company Interswitch has secured a $110 million joint investment from LeapFrog Investments and Tana Africa Capital to scale its digital payment services across the continent.
• The news comes almost three years since Interswitch’s last disclosed funding round when Visa paid $200 million for a 20% stake in the company. At $1 billion (its last know valuation), Interswitch is one of Africa’s largest electronic payments and infrastructure companies.
• The fintech powers much of the rails for Nigeria’s online banking system and is well-known for its point-of-sale terminals, online consumer payment platforms, Quickteller, and Verve, the biggest domestic debit card scheme in Africa, issuing over 35 million active cards since launch.

Source: TechCrunch

Our Takeaway

Africa’s tech industry is increasingly seeing mega funding rounds (above $100M) poured into growth-stage companies—like Interswitch’s latest raise—with the fintech sector leading the way. Last year, the ecosystem witnessed 14 megadeals coming from 12 companies and 48% of total equity funding went to these deals. Before 2021, only 8 megadeals had been recorded in the entire history of the African funding ecosystem.

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💰Coinbase-backed MARA gets $23m for its pan-African crypto exchange

Highlights

• MARA is a new pan-African crypto exchange looking to sit at the intersection of the emerging government- and retail-led crypto adoption in Africa.
• The company has announced the raise of $23 million in equity and token sale from investors that include high-profile crypto and web3 investors such as Coinbase Ventures, Alameda Research (FTX), and Distributed Global.
• MARA plans to launch a suite of products, including a custodial retail crypto wallet, a pro-exchange for professional traders, and a layer-one blockchain that aims to become the go-to network for developers to build Africa-focused crypto and blockchain products. The retail app will launch in July, with the exchange coming after that.

Source: Bloomberg

Our Takeaway

According to Chainalysis, the value of Africa’s cryptocurrency market rose to $105.6 billion between July 2020 and June 2021, a 1,200% surge, despite repeated efforts by governments on the continent to stifle adoption. Considering the prevailing unfavorable macroeconomic conditions in most African countries that have so far propelled adoption by Africans persist—including weak currencies, high unemployment rates, and low-income levels—we anticipate increased crypto uptake going forward, therefore validating MARA’s vision.

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🇳🇬Nigerian clean-tech startup Kaltani raises $4m

Highlights

• Nigerian clean-tech plastic waste recycling company Kaltani has raised $4 million in seed funding to expand its recycling operations across the country.
• Founded in Nigeria by Engineer Obi Charles Nnanna, Kaltani aims to solve Africa’s growing plastic waste crisis by promoting the circular economy and recycling best practices.
• The startup plans to use the funding to open 20 new collection and aggregation centers across Nigeria and increase its staff strength to over 500 people. These updates will augment Kaltani’s capacity substantially, allowing the company to recycle up to 15,000 tonnes of plastic waste each year.

Source: Disrupt Africa

Our Takeaway

In Nigeria, the bulk of recyclable waste collection and processing is carried out by informal waste pickers and processors, with unregistered SMEs dominating the billion-dollar recycling sector. Like Kaltani, many startups have emerged looking to help these informal players manage their funds and operations; improve the waste material collection process by minimizing human interference; and mitigate typical losses involved in the supply chain. Scale may be hard to find for startups in this space but it’s a good sign to see investors back founders that are solving the crucial socio-economic and environmental problem of waste management.