Nigeria’s Paga acquires Apposit, confirms Mexico and Ethiopia expansion – TechCrunch
That’s simply a part of Paga’s information. The Lagos primarily based startup may even launch its fee merchandise in Mexico this 12 months and in Ethiopia imminently, CEO Tayo Oviosu instructed TechCrunch
The strikes come a bit over a 12 months after Paga raised a $10 million Series B spherical and Oviosu introduced the corporate’s intent to broaden globally, whereas talking at Disrupt San Francisco.
Paga will leverage Apposit — which is U.S. included however operates in Addis Ababa — to assist that expansion into East Africa and Latin America.
Behind the acquisition is a narrative threaded with serendipity, return, and collaboration.
Both Paga and Apposit had been based by repatriate entrepreneurs. Oviosu did his MBA at Stanford University and labored at Cisco Systems earlier than returning to Nigeria.
Apposit CEO Adam Abate moved again to Ethiopia 17 years in the past for an project within the nation’s Ministry of Finance, after learning at Brown University and working in fintech in New York.
“I put together a team…to build…public financial management systems for the country. And during the process…brought in my best friend Eric Chijioke…to be a technical engineer,” stated Abate.
The two teamed up with Simon Solomon in 2007 to co-found Apposit, with a deal with constructing large-scale enterprise software program for Africa.
A 12 months later, Oviosu met Chijioke when he crashed at his home whereas visiting Ethiopia for a marriage. It simply so occurred Chijioke’s brother was his roommate at Stanford.
That assembly started an prolonged dialog between the 2 on digital-finance innovation in Africa and finally led to a Paga partnership with Apposit in 2010.
Apposit devoted an engineering crew to construct Paga’s fee platform, Eric Chijioke grew to become Paga’s CTO (whereas sustaining his Apposit function) and Apposit backed Paga.
“We aligned ourselves as African entrepreneurs…which then developed into a close relationship where we became…investors in Paga and strategically aligned,” stated Abate.
African roots, international ambitions
Fast ahead a decade, and the 2 firms have come fairly far. Apposit has grown its enterprise right into a crew of 63 engineers and technicians and has racked up a listing of shopper partnerships. The firm helped digitize the Ethiopian Commodities Exchange and has contracted on IT and software program options with banks non-profits and brick and mortar firms.
For a decade, Apposit has additionally supported Paga’s fee product growth.
Over that interval, Oviosu and crew went to work constructing Paga’s platform and driving digital fee adoption in Nigeria, dwelling to Africa’s largest economic system and inhabitants of 200 million.
That’s been no small job contemplating Nigeria’s proportion of unbanked was pegged as excessive as at 70% in 2011 and nonetheless lingers round 60%, in accordance with The Global Findex database.
Paga has created a multi-channel community to switch cash, pay-bills, and purchase issues digitally. The firm has 14 million prospects in Nigeria who can switch funds from one in every of Paga’s 24,411 brokers or by means of the startup’s cell apps.
Paga merchandise work on iOS, Android, and fundamental USSD telephones utilizing a star, hashtag choice. The firm has remittance partnerships with the likes of Western Union and permits for third-party integration of its app.
Since inception, the startup has processed 104 million transactions price $6.6 billion, in accordance with Oviosu.
With the acquisition, Paga absorbs Apposit’s tech capabilities and crew of 63 engineers. The firm will direct its boosted capabilities and complete workforce of 530 to assist expansion.
Paga plans its Mexico launch in 2020, in accordance with Oviosu.
Adam Abate is now CEO of Paga Ethiopia, the place Paga plans to go dwell as quickly because it good points native regulatory approval. The East African nation of 100 million, with the continent’s seventh largest economic system, is bidding to grow to be Africa’s subsequent startup hub, although it nonetheless lags the continent’s tech standouts — like Nigeria and Kenya — in startup formation, ISP choices and VC.
Ethiopia has additionally been sluggish to undertake digital finance, with lower than 1% of the inhabitants utilizing mobile-money, in comparison with 73% for Kenya, Africa’s mobile-payments chief.
Paga goals to shift the monetary needle within the nation. “The goal is straight-forward. We want Ethiopians to use the Paga wallet as their payment account. So it’s about digitizing cash transactions and driving financial services,” stated Oviosu.
With the Apposit acquisition and nation expansion, he additionally seems to develop Paga’s mannequin in Africa and past, as an rising markets fintech answer.
“There are several very large countries around the world in Africa, Latin America, Asia where these [financial inclusion] problems still exist. So our strategy is not an African strategy…We want to go where these problems exist in a large way and build a global payments business,” Oviosu stated.
Fintech competitors in Nigeria
As it grows overseas, Paga faces higher competitors in Nigeria. For the final decade, South Africa and Kenya — with the success of Safaricom’s M-Pesa product — have been Africa’s standouts in digital funds.
But during the last a number of years, Nigeria has grow to be a magnet for VC and fintech startups. This development reached a high-point in 2019 when Chinese buyers put $220 million into Opera owned OPay and Transsion backed PalmPay — two fledgling startups with plans to scale in Nigeria and broader Africa.
That’s a hefty battle chest in comparison with Paga’s complete VC haul of $34 million, in accordance with Crunchbase.
Oviosu names product market match and advantages from the corporate’s expansion as elements that may maintain it forward of those well-funded new entrants.
“That’s where the world-class technology comes in,” he stated.
“We also take a perspective that we cannot build every use-case,” he stated — contrasting Paga’s mannequin to Opera in Africa, which has launched a number of startup verticals round its OPay product, from ride-hailing to food-delivery.
Oviosu compares Paga’s method to PayPal, which permits third-party builders to form companies round PayPal because the fee answer.
With its Apposit acquisition and continued expansion, PayPal could grow to be greater than a mannequin for Paga.