Pan-African fintech startup, pawaPay, raises $9 million seed for expansion and talent recruitment

by | Aug 26, 2021

Today, Monday, August 26, 2021, Africa-focused fintech company, pawaPay announced the raise of $9 million in seed financing to strengthen its mobile money payment solutions team, scale operations, and foray into new markets.

This investment saw cheques from five firms. The round was led by Uk-based 88mph — a company that invests in web and mobile-centric technology solutions — and Chinese VC firm, MSA Capital. Other participants include African VC firm, Kepple Ventures; South African Vunani Capital; and Zagadat Capital, an investment firm owned by Oluwatosin Ajibade, popularly known as Mr Eazi in the Nigerian music scene.

Founded in 2020, pawaPay is a subsidiary of online betting platform, betPawa. It enables mobile payments for local and international transactions/financial activities by integrating data from Africa’s major telcos into one mobile money API. Businesses and individuals can process payments, receive and transfer money, and pay bills via mobile. 

Currently, pawaPay’s beta version is available in ten African countries: Cameroon, Mozambique, the Democratic Republic of Congo (DRC), Ghana, Nigeria, Rwanda, Kenya, Tanzania, Uganda, and Zambia. 

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A visit to the website revealed that new merchants can make their products available to 250 million new customers with a unified mobile payments API. They also claim to have processed 257.4 million transactions, worth $1.25 billion since launch.

Usually, sending and receiving payments from Africa to international destinations and vice-versa is a hurdle. Per TechCrunch, Nikolai Barnwell CEO pawaPay reveals that the platform was initially set up to help people send and receive money internationally using mobile money. 

Barnwell also says that he is bullish on the mobile money infrastructure as a medium to solve issues surrounding payments in Africa.

“We’re making a very heavy bet on the rise of mobile money and all the complexities that arise out of mobile money and all the infrastructure that needs to be built around payments with mobile money at its core. 

“And the way we’re looking at the continent, we’re looking at adoption rates for mobile money growing at an insane speed. It has become quite obvious that this is a very significant financial infrastructure, and there’s a lot of it that’s been missing if you want to work serious volume and businesses on mobile money.”

There are several hurdles to accurately determining mobile penetration in Africa. Terms like mobile access penetration, unique subscriber penetration, and SIM Card penetration are often used interchangeably, although they mean entirely different things. 

While mobile access penetration refers to the population of individuals who can regularly access a mobile — although not necessarily owning one — unique subscriber penetration refers to the number of people who own mobile phones. On the other hand, SIM card penetration refers to the total number of SIM card connections in a region. 

As of 2013, the African Development Bank (AfDB) and The World Bank reported 650 million mobile users in Africa, surpassing the number in the United States or Europe. Owing to the prevalence of mobile phone usage in most parts of Africa, mobile money is one of the most used media for digital financial transactions. 

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Barnwell believes that but for rigid regulations in most African countries, the platform would have gained more traction than it has now, and this is an obstacle they are ready to overcome.

“We’ve gone in and decided we want to be completely regulated. We want to be completely covered in all the markets, with full licensing and be a very stable reliable premium product in these markets,”
While major payment solutions in Africa like PayStack and Flutterwave revolve around credit cards and banks, platforms like MFS Africa and pawaPay are purely mobile focused.

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