TeamApt, a Nigerian fintech startup that provides business payments and banking platforms, has secured a new investment round believed to be around $50 million.
The investment was led by QED Investors, a U.S. fintech-focused venture capital firm, and backed by existing investors such as Novastar Ventures, Lightrock and Bill.
Founded in 2015, TeamApt has grown to become one of the largest operators of financial services in Nigeria. The startup in a short while processes a $100 billion annualized run-rate transaction value via its products Moniepoint and Monnify.
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Per TechCrunch, Moniepoint now serves 400,000 small and medium-sized businesses across Nigeria, allowing them to access various features to manage operations: working capital, business expansion loans and business management tools such as expense management (business payments cards), accounting and bookkeeping solutions and insurance.
TeamApt’s founder and CEO Eniolorunda said this new financing round would help the company to expand its credit offerings.
Presently, TeamApt’s lending portfolio is small. The company is thus seeking to expand its lending that has been operated from the balance sheet of its microfinance bank subsidiary due to its size. The portfolio expansion will see TeamApt sticking to its multiple lending partnerships plan. Per TechCrunch, this will include banks, development finance institutions and securitization structures, to access debt facilities.
QED made TeamApt its first investment in Africa having seen the company’s growth speed and potential. For four years, TeamApt bootstrapped before it raised a venture round in 2019, but the company has recorded 300% annual growth in revenue and market cap. TechCrunch reported, citing sources, that the company generated more than $100 million in annualized revenue last year.
“From our bootstrapping days, we built products where we can see positive unit economics from day one, which has continued to be reflected in our profitability,” Eniolorunda said in an email response to TechCrunch. “This has put us in the realm of the few attractive cash-flow-positive hyper-growth companies — even as we continue growing at triple digits year-on-year, while at the same time expanding our margins.”
QED is a notable investor in the payment industry, but has stayed away from Africa for reasons believed to involve the perceived minimal growth potential of the continent. However, in the past few years, Africa has risen to the top in payment services. Nigeria leads the pack with over $800 billion in digital transactions annualized in the first four months of this year.
The West African country is breeding fintech startups that are attracting millions of dollars in investment monthly, and some of them have already attained unicorn status. Seeing the wave of fortune blowing across the payment industry, QED is expected to bet more funds in the African market henceforth.
“I am proud to bring Africa to QED and QED to Africa. I could not think of a better way to enter the continent than with our investment in TeamApt,” said Gbenga Ajayi, QED Investors partner and head of Africa, in a statement. “Tosin and his team have steadily built an impressive payment and distribution network across Nigeria over the past five years. Their strong and positive unit economics, coupled with a deep customer focus, will enable them to continue to build out an even more expansive network.”