Nigerian Fintech Platform, Appzone, raises $10 million Series A Funding

Appzone, the Pan-African fintech software provider building proprietary solutions for the continent’s banking and payments industries, has today announced the close of its $10 million Series A round.

Led by CardinalStone Capital Advisers with participation from V8 Capital, Lateral Investment Partners, Constant Capital, and Itanna Capital Ventures, the new round will bolster investment in Appzone’s core technologies and kick off a wave of new country expansions in a drive to build out a financial operating system intended to completely digitise and automate the delivery of financial services on the continent.  

Launched in 2008, Appzone delivers best-in-class products for digital core banking and interbank transaction processing with clients across seven African countries including high-profile names like Access Bank, GT Bank and Zenith Bank.

Since its inception, the company, also an alumnus of the Google launchpad accelerator, has led Africa’s fintech sector through radical innovation that resulted in a number of global firsts from the continent, including the world’s first decentralised payment processing network , the first core banking and omni-channel software on the cloud and the first multi-bank direct debit service based on single global mandates. To date, the company’s platforms have served 18 commercial banks and over 450 microfinance banks, amassing a yearly transaction value and yearly loan disbursement of $2 billion and $300 million respectively.

As Africa’s traditional banks and fintech startups grapple with the increasing threat from telco companies and big tech players, Appzone’s products effectively and affordably equip them to deal with the sector’s most pressing challenges including legacy cost structures and a major lack of operational efficiency. Currently, due to a severe dearth of high-quality localised solutions that address these problems, traditional and challenger banks in Africa are limited to using foreign technology solutions tailored for Western markets - many of which are plagued with the huge stumbling blocks of prohibitive pricing, insufficient flexibility to innovate and a lack of local tech support.

Speaking on the fundraise, Appzone’s Co-Founder and CEO Obi Emetarom says: “We’re excited not only to be securing a significant capital raise, but also welcoming on board some strategic investors whose support will be key to our growth journey. Today’s news allows us to scale Appzone’s products and services rapidly. For the last 12 years, we’ve worked in stealth mode, building the really complex infrastructure to power the continent's growing digital financial services space and forging partnerships with the continent’s biggest financial institutions.

In terms of next steps, we are now looking to hire from Africa’s top 1% to grow our team of elite talent who have proven themselves to be true  African builders; the brightest senior software engineers and domain experts, doing the incredibly hard work of building the backbone and next generation infrastructure for digital financial services at a level beyond world-class. We are seeking out gifted and audacious engineering and entrepreneurial minds, hungry to accelerate economic prosperity and tackle challenging technology with us. We are not just trying  to bring African fintech on-par with the rest of the world - we exist to make our financial sector the most innovative and technologically advanced on the globe through solutions built for Africa by Africans.”

Currently, Appzone’s clients spread across Nigeria, Ghana, Gambia, DRC (Democratic Republic of Congo), Tanzania, Senegal and Guinea and to-date, the company has raised $15 million in equity funding with previous investors including Lateral Capital, GreenHouse Capital, Timon Capital and Itanna. In 2018, the company obtained an officially approval from the Central Bank of Nigeria to operate as a Payment Solution Service Provider (PSSP) and has been the recipient of a number of industry awards including the Frost & Sullivan Award, NAMB (National Association of Microfinance Banks) and CeBIH (Committee of eBusiness Industry Heads) awards.

Yomi Jemibewon, Co-Founder and Managing Director of Cardinal Stone Capital Advisers said: “Our 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."

Despite its challenges, Africa’s banking sector is projected to reach a total market valuation of $129 billion by 2022 according to McKinsey & Co. As the industry struggles to serve Africa’s huge unbanked population, there has been a growing influx of fintech platforms filling the gap. In recent years, these startups have attracted major interest from investors across the globe and in 2020, the sector accounted for over a third of the total $1.3 billion in funding secured by African tech startups.