Technology

Paga to Accelerate Growth With $10m Investment

Published

6 years ago

September 9, 2018

Paga to Accelerate Growth With $10m Investment

Paga, a mobile money company in Nigeria, has announced that it has closed a $10m growth financing led by the Global Innovation Fund.

Also participating in the round are existing investors, Goodwell (managed by Alitheia Capital), Adlevo Capital, Omidyar Network and Unreasonable Capital.

According to the company, this new financing brings the total that Paga has raised since inception in 2009 to $35m.

It commenced commercial operations in August 2012 and recently revealed that since then, it had served nine million customers and created over 10,000 jobs through its 17,000 agents who hire workers to run their stores.

The Chief Executive Officer, Global Innovation Fund, Alix Zwane, said, “The GIF is proud to lead Paga’s Series B2 round.

“Paga’s mission of helping people ‘make life possible’ aligns with our core mission of supporting entrepreneurs and innovators that seek to improve the lives of those living on less than $5 per day. I am pleased that the GIF will help to enable Paga’s next phase.”

Nigeria is one of the fastest growing emerging markets in the world and the biggest economy in Africa, with $405bn Gross Domestic Product. The country currently has a population of 186 million but is expected to become the third largest country in the world (behind India and China) by 2050 with 411 million people.

Financial inclusion experts say that in Nigeria today, over 100 million adults find it difficult to transfer or leverage money for basic human needs. According to them, this problem is one that exists even for those that are banked, and is something Paga’s team is passionate about solving.

The Managing Partner, Alitheia Capital, Tokunboh Ishmael, said, “The growth financing announced today will enable Paga to further scale its business in Nigeria to drive the growth of Paga’s mobile wallet and agent network, and explore expansion opportunities in other markets where similar problems exist.

“Our belief in Paga as an effective platform to drive financial inclusion is unwavering. Paga has shown solid progress, and alongside other investments in our portfolio, has played a huge role in our ability to demonstrate that enabling access to essential services for the broad population has both significant financial and developmental impact.”

According to Chief Executive Officer, Paga, Tayo Oviosu, the company’s transformative purpose is to make it simple for one billion people to access and use money.

Oviosu stated, “With a nationwide network of 17,000 agents and more than nine million users accessing funds in Nigeria, Paga is making strides by enabling efficient digital payments and building successful societies. This has translated to over 57 million transactions processed worth approximately $3.6m, a business that is profitable and growing at 110 per cent compounded annual growth rate (2016-2018).

“At Paga, we are building an ecosystem that enables people to digitally send and receive money, and creating simple financial access for everyone.”

He added, “We do not seek to be a bank, but rather to partner the banks and financial institutions in the markets we operate. We are proud to welcome the Global Innovation Fund as a partner on our journey.

“We were attracted to them because of their global focus, network to help us achieve our ambition and a clear alignment of values. It is also fantastic that our existing investors remain committed to our strategy and are demonstrating that by their additional investments.”

Oviosu had earlier said that the firm’s mission was strengthened by the recent release of its new money transfer app that would drive the use of the Paga wallet for person-to-person transfers and in-store payments.

“In a country where digital financial services still leave much to be desired, Paga is staking a claim at being the Venmo of Nigeria. With cash still being king in emerging markets and the general unreliability of Point of Sale services, coupled with the sparsely located banks and Automated Teller Machines, the company has created a viable solution for ease of payments: a simple app that allows you to send money to or request money from anyone only using their phone number or email address, and a digital wallet to which you can link any debit card or bank account,” he noted.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Telecommunications

Telecom Tariffs Set to Rise as FG Proposes 12.5% Tax Hike

Published

1 day ago

October 22, 2024

Yetunde Olugbenga

Telecommunication service providers in Nigeria have announced an impending increase in customer tariffs for calls and data.

The anticipated rise is attributed to the Federal Government’s proposed 12.5% value-added tax on telecommunications, which would represent a 66.67% increase from the current 7.5%.

According to telecom operators, the increase in tax would force them to also increase the tariff charged for consumers’ calls and data.

The Global System for Mobile Communications (GSMA), a non-profit organisation representing the interests of mobile network operators worldwide stated that Nigeria’s telecom industry is already overtaxed. Therefore, any increase in the tax rate would impact customer tariffs.

GSMA declared that the telecommunication industry pays over 50 different taxes to various government arms.

This tax increase is in line with the new Bill reform, which imposes excise duties on technology and consumer services industries, including telecommunications, gaming, gambling, lotteries, and betting services.

As part of a broader tax reform initiative, the proposed Bill aims to unify the fiscal legislation governing taxation in the country.

“A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,” the Bill read.

“Services, including telecommunications, gaming, gambling, betting, and lotteries however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the Tenth Schedule to this Act in a manner as may be prescribed by the Service,” the Bill outlined.

“Amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth,” the Bill indicated

In response to the proposed tax reform, the President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, expressed concern that the government’s proposal could cripple the telecommunications industry.

“They are essentially trying to kill the industry by imposing more burdens on it,” he stated

Fintech

US Continues to dominate Global FinTech Landscape in Q3 2024, Witnesses Funding of $2.7B

Published

5 days ago

October 18, 2024

Samed Olukoya

The US boasts of a bustling FinTech landscape with more than 7K funded companies and 137 active FinTech Unicorns. Though the US ranks first globally in terms of funding in the FinTech sector in Q3 2024, this is the least funded quarter in the past five years.

Q4 2021 was the highest funded quarter in this space, after which the funding started to experience a steady decline.

Tracxn, a leading global SaaS-based market intelligence platform, stated in its Geo Quarterly Report: US FinTech Q3 2024.

The US FinTech startup ecosystem raised $2.7 billion in Q3 2024, a 30% decline compared with $3.9 billion raised in Q3 2023 and a 40% decline from $4.5 billion in Q2 2024.

Late-stage funding in Q3 2024 fell 32% to $1.3 billion, from $1.9 billion raised in Q3 2023. Early-stage investments stood at $1.2 billion in Q3 2024, a drop of 29% from $1.7 billion in Q3 2023. Seed-stage funding, too, fell 49% to $186 million from $364 million in Q3 2023.

Three companies attracted funding of $200 million and above. Human Interest raised $267 million in a Series D round at a post-money valuation of $1.33 billion, while FLYR raised $225 million in a Series D round. Earned Wealth secured $200 million in a Series B round.

Three other companies reported $100M+ rounds, with Aven becoming the only new unicorn in the third quarter of this year, after raising $142 million at a valuation of $1 billion.

Finance and Accounting Tech, Payments and Investment Tech were the top-performing sectors based on funding in Q3 2024 in this space.

The Finance & Accounting Tech segment witnessed total funding of $643 million in Q3 2024, a drop of 34% compared to $967 million raised in Q3 2023.

Funding raised by the Payments sector fell 22% to $573 million in Q3 2024 from $737 million in Q3 2023. Investment Tech companies raised a total funding of $547 million in Q3 2024, 18% lower than the $669 million raised in Q3 2023.

The third quarter of 2024 was weak in terms of exits. None of the companies from the US FinTech sector went public in Q3 2024, as against one IPO each in Q3 2023 and Q2 2024.

The number of acquisitions too, fell to 48 in Q3 2024 from 54 in Q3 2023 and 62 in Q2 2024. ShareFile was acquired by Progress at a price of $875 million, and Stronghold Digital Mining was acquired by Bitfarms for $175 million.

Among US cities, San Francisco and New York City together accounted for 50% of the total funding raised by the sector in the third quarter of this year.

FinTech startups based in San Francisco raised $750.2 million, while those headquartered in New York City and Santa Monica raised $610.1 million and $225 million.

Y Combinator, Techstars and a16z are the overall top investors in this space. Y Combinator, Castle Island Ventures & Plug and Play Tech Center were the top seed-stage investors in Q3 2024, while Curql, Redpoint Ventures and Brewer Lane Ventures took the lead in early-stage investments.

The US government is taking several initiatives to stimulate investment and innovation in the FinTech sector, which could give a boost to these startups in the coming years.

E-commerce

South Africa, Tunisia Record Job Losses as Jumia Shuts Down Outlets Over Diminishing Returns, Hopes on Nigeria, Others

Published

6 days ago

October 17, 2024

Ugwoke Ogbodo

Africa-focused e-commerce retailer Jumia Technologies has announced its decision to shut down its South African online fashion retailer Zando and its Tunisian operations by the end of the year.

The development, Investors King gathered, followed diminishing returns in the countries which has been having significant impacts on the firm.

Francis Dufay, the Chief Executive Officer of the retailer giant, expressed strong confidence in Nigeria’s market, saying the firm will refocus on more profitable markets such as Nigeria.

Dufay said Jumia is aiming at more profits, hence, its decision to implement aggressive cost-cutting measures, which include reducing its workforce, exiting the everyday grocery and food delivery sectors, and scaling back delivery services unrelated to its core e-commerce business.

He said the trajectory of the South Africa and Tunisia did not align with the strategy of the group, citing complex macroeconomic conditions, a competitive landscape, and limited medium-term growth potential in these regions.

Stressing that the group’s exit plan is the right decision, Dufay emphasised that the move will allow the company to concentrate its resources on the other nine markets including Nigeria, where growth prospects are more promising.

Jumia’s remaining markets include Egypt, Kenya, Morocco, and Nigeria.

Dufay maintained that success in these regions could help recover volumes lost from the closures in South Africa and Tunisia.

Giving more facts on the level of shortage Jumia incurred in South Africa and Tunisia, he noted that Zando and the Tunisian operations contributed only 2.7% of total orders and 3% of Gross Merchandise Value during the first half of the year.

Zando.co.za, founded in 2012, has established itself as a prominent online fashion platform in South Africa. Meanwhile, Jumia’s Tunisian operations have been running under the Jumia brand for a decade, offering general merchandise.

Dufay confirmed that there are no plans to sell either operation, which will hold clearance sales before their shutdown.

Findings by Investors King revealed that no fewer than 110 persons will lose their jobs in the affected countries once the closures take effect.

Although some employees may be relocated within the company’s other divisions.

This decision comes shortly after South Africa’s largest online retail group, Takealot, announced the sale of its fashion subsidiary, Superbalist, amid rising competition from fast-fashion e-commerce giants like Shein and Temu. Dufay acknowledged that the growth potential in South Africa is increasingly challenging due to the highly competitive environment.