Appzone, a fintech software provider that builds proprietary solutions for these financial institutions and their banking and payments services, has announced it raised $10 million in a new Series A investment.
Founded by Emeka Emetarom, Obi Emetarom, and Wale Onawunmi in 2008, the Lagos-based company provides commercial banks with custom software development services.
The Series A was led by Nigeria-based investors such as CardinalStone Capital Advisers, a Lagos-based investment firm. 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.
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The Series A round being led by Nigeria-based investors is welcome shift in the Nigerian tech ecosystem, where foreign investors have dominated most fundraising series.
Appzone launched its first core banking product targeting microfinance institutions in 2011. In 2012, it 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 is a Google for Startups Accelerator that has made a remarkable difference by introducing first-of-its-kind technology to the African fintech industry.
The company says it created the world’s first decentralised payment processing network, the first core banking and omnichannel software on the cloud, and the first multi-bank direct debit service based on single global mandates.
The investment round coincidentally happened at the same time the company is introducing the scaling of a third layer that focuses on end-user applications.
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, Emetarom said.
Appzone plans to develop a unit outside its banking and fintech layers, 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 said.
“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.
Tech Crunch reported that the company is planning to blitzscale its products and services after working silently for more than a decade.
To do this, it will focus on 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.
In addition, 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.“
Appzone had earlier, closed a $2 million from South African Business Connexion (BCX) in 2014. And in 2018, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. But overall, the company said it has raised $15 million in equity funding.