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Fund Raising

Nigerian Fintech Appzone Raises $10M for Expansion and Proprietary Technology

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Africa’s fintech space has gained proper attention over the past few years in investments but it is not news that startups still battle with offering high-quality products. However, they seem to be doing quite well compared with traditional banks that face challenges like legacy cost structures and a major lack of operational efficiency.

Appzone is a fintech software provider. It is one of the few companies that builds proprietary solutions for these financial institutions and their banking and payments services. Today, the company is announcing that it has closed $10 million in Series A investment.

Typically, African financial institutions rely on using foreign technology solutions to solve their problems. But issues around pricing, flexibility to innovate, and a lack of local tech support always come up. This is where Appzone has found its sweet spot. The company based in Lagos, Nigeria, was founded by Emeka EmetaromObi Emetarom, and Wale Onawunmi in 2008.

Appzone clearly plays a different game from other African fintechs. One clear differentiator is that the company functions as an enabler (at payment rails and the core infrastructure) within banking and payments.

It commenced as a services firm to provide commercial banks with custom software development services. In 2011, the company launched its first core banking product targeting microfinance institutions. The following year, Appzone launched its first product (branchless banking) for commercial banks. It went live with its mobile and internet banking service in 2016 and launched an instant card issuance product in 2017. In 2020, the company launched services catered to end-to-end automation of lending operations for banks and blockchain switching.

“We started Appzone with the intention to build out innovative local solutions for banking and payments on the continent,” CEO Obi Emetarom told TechCrunch. “The focus was to leverage our ability as an enabler to create proprietary technology for both segments.”

Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa. Together, they amass a yearly transaction value and yearly loan disbursement of $2 billion and $300million.

Since its inception, the Google for Startups Accelerator alumnus claims to have led Africa’s fintech sector in some global firsts from the continent. First, the company says it created the world’s first decentralised payment processing network. Second, the first core banking and omnichannel software on the cloud. Third, the first multi-bank direct debit service based on single global mandates.

Emetarom likes to describe Appzone as a fintech product ecosystem with an emphasis on proprietary technology. So far, we’ve touched on two layers of this ecosystem—the digital core banking service providing software that runs financial institutions’ entire operations and interbank processing, which integrates these institutions into a decentralized network powered by blockchain.

Coinciding with this investment is the introduction and scaling of a third layer that focuses on end-user applications. Appzone, having built both banking and fintech layers, wants to connect individuals and businesses to their services. This is where most new-age fintech startups operate, and although Appzone is coming late to the party, it has a bit of an edge, the CEO believes.

“Most of these companies operating in end-user applications have to depend on services from core banking and interbank processing to be able to get their own offerings out there. For us, I think we have an advantage in terms of costs and flexibility because we are already operating in both layers,” Emeratom said in relation to what he thinks of competition.

The company is coming out to blitz scale its products and services after working in stealth mode for more than a decade. One way it wants to carry this out will be to take its pan-African expansion sternly even though a large part of its 450 clients are based in Nigeria. Other countries with a presence include the Democratic Republic of Congo, Ghana, Gambia, Guinea, Tanzania, and Senegal. Before now, Appzone lacked the resources to push into these markets aggressively even though they showed promise. But having closed its Series A, the plan is to drive growth in these countries and expand across more African countries.

Another means Appzone plans to achieve scale is by growing its engineering team — a department it takes pride in. These engineers make up half of Appzone’s 150 employees and there are plans to double down on this number. Like most Nigerian startups these days, Appzone is big on senior engineers. Still, while it might present a problem to other companies, Emetarom says the company has no issue training promising junior talent to grow in expertise.

“Our proprietary tech allows us to innovate at a fraction of a cost, and they are built by essentially the best local talent available. Because those systems are really complex and the level of innovation required is on another level, we literally seek out the to 1% of talent in Nigeria,” he remarked. “We know that even though the expertise isn’t there, we can accelerate acquiring that expertise when we train the very best talents. The more we train our engineers, the faster they grow in terms of expertise, and they will be able to deliver at the same level of world-class quality we expect.“

Back to the round, a noteworthy event is that most investors who took part are based in Nigeria despite its size. CardinalStone Capital Advisers, a Lagos-based investment firm, led the Series A investment. Other investors based in the country include V8 Capital, Constant Capital, and Itanna Capital Ventures. New York-based but Africa-focused firm Lateral Investment Partners also participated.

Before now, Appzone closed a $2 million from South African Business Connexion (BCX) in 2014. Four years later, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. But overall, the company says it has raised $15 million in equity funding.

Speaking on the investment, Yomi Jemibewon, the co-founder and managing director of Cardinal Stone Capital Advisers, said the firm’s investment in Appzone is further proof of Africa’s potential as the future hub of world-class technology.

“Appzone is building a disruptive fintech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure and software as a service. The impact of Appzone’s work is multifold — the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best in class employment opportunities,” he added.

Appzone’s funding continues the fast-paced investment activities witnessed by Africa’s fintech space after a slow January. In the last two months, more than eight fintech startups have secured million-dollar rounds. This includes very large rounds by South African digital bank TymeBank ($109 million) in February and African payments company, Flutterwave ($170 million) in March.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Fund Raising

Private Investors to Raise $250 Million for New National Carrier – Hadi Sirika

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Nahco aviance

The Minister of Aviation, Hadi Sirika, has said private investors are expected to raise the $250 million needed to commence the new national carrier.

The minister stated this in a document detailing the status of the Aviation Road Map.

Sirika said the project development phase has been completed with the development of the Outline Business Case (OBC) and subsequent issuance compliance certificate by the Infrastructure Concession Regulatory Commission (ICRC).

The next step which will involve the commencement of the procurement phase is placement of Request for Qualification (RFQ) in local and international media. $250 million approximately is to be raised to start up the airline by private investors,” he said.

“The establishment of a national carrier will enable Nigeria to gain optimal benefits from Bilateral Air Services Agreements, take full advantage if the Single African Air Transport Market (SAATM), introduce competition, leading to competitive fares and better services as well generate employment.

“The National carrier project will be private sector driven with the government not holding more than five per cent shares. The private sector consortium may comprise reputable international airlines such as Qantas, Leasing companies, Aircraft manufacturers, Original Equipment Manufacturers (OEMs) financial and institutional investors.

“The government is providing the required support by enabling an environment in terms of sustainable policies, allocation of BASA routes, provision of financial guarantees and ensuring fiscal incentives to sustain the success of the airline,” he said.

As for the establishment of Maintenance, Repair and Overhaul (MRO) Centre, Sirika explained in the document that the Ministry is at advanced stage in the procurement phase, adding that ‘a preferred partner has been selected, the next step I commencement and negotiation with the preferred partner and finalisation of Full Business Scale (FBS).

The proposed independent MRO facility in Nigeria will serve the maintenance demands of airlines in West and Central Africa and also provide maintenance for national carrier and African leasing companies. The MRO will be structured as a Build Operate and Transfer (BOT) model with the government acting as both the grantor of the concession and facilitator of the project, while the private partner consortium will be responsible for designing, building, financing, operating and maintaining the proposed facility for an agreed concession period.

“The consortium is expected to comprise an Independent MRO company, real estate development company, construction company, financial and institutional investor. The proposed facility will have the capacity to serve both narrow- and wide-bodied aircraft maintenance requirements and will be located in Abuja, Nigeria”.

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Fund Raising

Coin Metrics Closes $15M Series B Round Led By Goldman Sachs

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Coin Metrics, the leading provider of crypto financial intelligence, announced that it raised $15 million in Series B financing, led by Goldman Sachs. 

Castle Island Ventures, Highland Capital Partners, Fidelity Investments, Avon Ventures, Communitas Capital, and Collab+Currency are also increasing their investment in the company after participating in previous fundraising rounds.

They are joined by new investors Acrew Ventures, Morningside Group, BlockFi and Warburg Serres Investments. Mathew McDermott, Managing Director at Goldman Sachs, and head of their blockchain and crypto expansion efforts, will join Coin Metrics’ Board of Directors.

Coin Metrics provides network data, market data, indexes and network risk solutions to the most prestigious institutions touching cryptoassets. This financing will accelerate the company’s global expansion, enable further product innovation, and allow existing offerings to touch even more cryptoasset networks and markets.

The company institutionalized their network and market data offerings over the past 18 months, creating a resilient infrastructure to meet the needs of the most discerning organizations. Their index offering, which leverages elements of the market and network data offerings, has been adopted by some of the largest names in the cryptoasset ecosystem, including Fidelity Investments, Osprey Funds and BlockFi.

Additionally, Coin Metrics recently announced several new products, including a network risk management offering, FARUM™, and a universal block explorer, ATLAS™, both of which leverage the infrastructure of the existing data business. “FARUM and ATLAS are perfect complements to our network and market data products,” said Tim Rice, co-founder and CEO of Coin Metrics. “The tremendous interest we are seeing in these offerings reinforces the value of on-chain data to institutions engaging in cryptoassets. I couldn’t be more proud of what the team has built over the past 12 months. Our data is clearly on a path to becoming an integral part of the infrastructure for the future of finance.”    

“Data is critical for the mainstream adoption of cryptoassets by traditional investors and financial services players. Our clients will greatly benefit from Coin Metrics’ institutional-grade data insights and emerging risk management tools,” said Mathew McDermott, Global Head of Digital Assets of Goldman Sachs. Marianna Lopert-Schaye, in Firmwide Strategy at Goldman Sachs added, “Coin Metrics is at the forefront of innovation and institutionalization in the digital asset markets. We are excited to be leading their Series B, thereby enabling their growth and supporting their mission to be the leading provider of data-driven market insights and intelligence for institutions in crypto.”

Since its Series A in 2019, Coin Metrics has built a world-class team, marrying cryptonative talent with veterans of the traditional financial services and data industries. The company will continue to focus on attracting the best talent to set the industry standard for how crypto networks and assets are monitored and analyzed and share insights and intelligence to enhance the cryptoasset ecosystem as a whole.

Goldman Sachs is continuing to seemingly warm to more companies and financials innovations of the crypto space this year. Last week, the firm identified 19 stocks from crypto and blockchain firms that had outperformed the S&P500 in the year to date.

The financial giant is also reportedly preparing to make Bitcoin (BTC) and other cryptocurrencies available to its clients in the second quarter of 2021.

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Fund Raising

PayPal Crypto Partner Paxos raises $300M

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Paxos, a major cryptocurrency company and PayPal’s crypto collaborator, has completed a massive fundraising round shortly after receiving preliminary approval to form a national trust bank.

On Thursday, the firm announced a new $300-million Series D funding round bringing Paxos’ valuation to $2.4 billion. The new funding round included previous Paxos investors — PayPal Ventures, Declaration Partners, Mithril Capital, Senator Investment Group, Liberty City Ventures, WestCap and others.

The newly raised funds will help Paxos continue investing in the development of enterprise-grade infrastructure and further grow its commitment to regulation, security and compliance, as well as expand operations, the firm said.

Following preliminary approval granted by the United States Office of the Comptroller of the Currency last week, Paxos also plans to establish the Paxos National Trust Bank in the near future. The company also applied for a clearing agency registered with the Securities and Exchange Commission and is pursuing a Major Payment Institution license in Singapore.

Paxos co-founder and CEO Charles Cascarilla said that demand for the company’s enterprise solutions has accelerated much faster than the firm had anticipated.

Founded back in 2012, Paxos emerged as a major industry player allowing users to tokenize, custody, trade and settle digital assets. Paxos has issued stable coins like U.S. dollar-pegged Paxos Standard and gold-backed PAX Gold.

Last year, PayPal announced a partnership with Paxos to allow users to buy, sell and hold cryptocurrencies such as Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH) and Litecoin (LTC). Paxos also assisted PayPal-owned payments firm Venmo in launching cryptocurrency trading last week.

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