Dash, Ghana-based unified payments app has announced that it has raised $32.8 million in an oversubscribed seed round to facilitate interoperability for digital payments platforms in Africa.
The round was led by New York-based Insight Venture Partners. Other investors in the round include Global Founders Capital and 4DX Ventures, who participated alongside ASK Capital, Techstars, Guillaume Pousaz’s Zinal Growth Partners, Jitendra Gupta of Jupiter Money, Amrish Rau of Pine Labs, the founders of Moss, executives from ProcessOut and the founders of PennyLane.
The deal, which ranks among the largest in Africa, will help in building a Mastercard and Visa sort of intermediary services for mobile payment wallets across Africa. The startup said it will use the fund to expand to new markets such as Tanzania and South Africa, get the licenses needed to operate there, build out its team, invest in technology and launch new features.
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Dash was founded by its CEO Prince Boakye Boampong in 2019, who was inspired by the boom of mobile wallets-based payments he witnessed in Kenya back in 2014. Boampong, who is also the founder of OMG Digital, a YC-backed Ghanaian media startup, saw lack of interoperability in the booming mobile wallet-based transactions across Africa as a huge friction that needs to be fixed.
“I was blown away by the ubiquity and convenience of mobile money in 2014 when I visited Kenya for the first time. However, there are over 200 mobile money wallets and 100 banks across the continent that [do] not work with each other,” the chief executive officer told TechCrunch.
As TechCrunch noted, while the mobile wallets like MTN MoMo and Safaricom’s M-Pesa, command millions of users in Ghana, Kenya and Nigeria; a Kenyan who uses M-Pesa and travels to Ghana finds it difficult to send money to a Ghanaian who uses MTN MoMo in Ghana, because both mobile money operators don’t permit transactions between each other. This means when they travel, they need to swap currencies or switch to the mobile money app working in their destination.
Dash’s idea is to create a network where mobile money and traditional banks can rapport and facilitate transactions for consumers and businesses. Just like Visa or Mastercard, Dash routs payments through banks and telcos regardless of who issued it. This means mobile wallet users in Ghana, Nigeria and Kenya, where Dash’s service is operational for now, can connect their bank or mobile money accounts to Dash, pay bills, and send and receive money to other users while the platform handles currency conversions.
“We’re building this interoperability so a Kenyan traveling to Ghana or Ghanaian travelling to Kenya would be able to pay for stuff without having to change currencies or setting up accounts when they touch ground,” Boampong said. “We’re taking a page from AliPay and PayTm by building features that will make the lives of our users easier without having to switch from different providers.”
Dash closed first closed its seed round in October. It was reopened as investors’ interest in the startup rocketed, with an $8 million seed fund and 200,000 users said to have executed transactions worth $250 million.
“The company makes revenue from processing fees, savings (interest earned when users save), FX fees when Dash is used cross-border, bill payments (commission earned when users pay bills on Dash) and subscription (for Dash+, its premium service).”
The revenue from these avenues paints a bright future for the startup as its volume of transactions increases. Dash said it processed over $300 million in TPV in January, up 300% monthly from Q4 2021. Boampong said in total, it has processed over $1 billion since its launch in 2020 from 1 million customers the company has acquired from Ghana, Kenya and Nigeria.