Despite the week ending early due to the Easter holiday, we recorded a significant number of funding deals and activities across the African startup ecosystem. South African startups dominated the funding news last week, as two venture capital firms secured investments for their new funds and a partnership was announced between the Ethiopian national payment switch, Ethswitch, and Mastercard.
Let’s get into the details.
Series A
Peach Payments, a South African fintech startup, has secured $31 million (€29 million) in a Series A funding round led by Apis Partners LLP, a UK-based asset manager.
Founded in 2012 by Rahul Jain and Andreas Demleitner, Peach Payments offers a toolkit that enables merchants to accept, manage, and make payments via mobile and the web. Its services include online payment acceptance, pay-outs, subscription solutions, and a variety of payment methods including cards, electronic funds transfer, digital wallets, mobile money, and Buy Now Pay Later options.
The investment will be used to expand into new African markets, enhance its product offerings, and reinforce its core merchant value proposition.
Series B
Yellow, a South African renewable energy provider, has announced the first close of its Series B equity round. An undisclosed amount was raised from Triple Jump‘s Energy Entrepreneurs Growth Fund (EEGF) to enable the company to continue its expansion across the continent.
Founded in 2017 by Michael Heyink and Robert van Zyl, Yellow’s digital technology platform enables a distributed network of sales agents to serve rural households with life-changing products and services such as off-the-grid solar and internet connectivity solutions.
The capital raised through this equity round will enable Yellow to continue executing on its strategy of delivering the best value for money products by identifying and attracting customers committed to investing in assets with long term improvements for their lives.
Debt
Paymenow, a South African fintech startup, has secured a $14 million (R250 million) debt facility from Rand Merchant Bank (RMB) to expand its earned wage access (EWA) platform in the country.
Founded in 2019 by Bryan Habana, Deon Nobrega, Gerbrand Potgieter, and Willem van Zyl, Paymenow’s EWA platform provides employees with early access to a portion of their earned wages before the payroll cycle ends, without having to resort to expensive loans. The platform also utilizes gamification to take employees on a journey to financial wellness, rewarding them with lower service fees as they complete stages and improve their status.
In addition to its operations in South Africa, Paymenow has expanded into Namibia and Zambia, becoming the first EWA provider to launch in these countries. The company also plans to expand further into other African countries, including Lesotho, Ghana, and Kenya.
Others
Shuttlers, a Nigerian mobility startup, has raised $4 million in a new funding round led by Verod-Kepple Africa Ventures, with participation from VestedWorld, SheEquity, CMC 21 & Alsa, and EchoVC.
Launched in 2016 by Damilola Olokesusi, Shuttlers is a shared mobility company that allows individuals and corporate passengers to book rides on multiple bus routes via an app. Shuttlers provides partner companies in Lagos and Abuja with a bus-sharing platform that offers mobility options for their employees. The platform also offers features such as live bus tracking, optimal routing based on traffic, digital payments, and ride schedules.
With this recent financing, the company plans to build infrastructure to support its business, expand its employee transportation offerings to more corporate partners, and increase its market share. The company also intends to hire more sales, marketing, and customer support staff as it looks to expand to five other cities in Nigeria by next year.
Xente, an Ugandan digital payment platform, has raised an undisclosed amount of funding from Renew Capital.
Founded in 2014 by Allan Rwakatungu, Xente allows businesses to make payments through various channels such as cards, mobile money, domestic and international bank transfers, as well as pay bills and send airtime and data. The platform also allows them to manage their petty cash expenses more efficiently, simplifying accounting and finance.
With the new funding, Xente aims to expand its user base and enhance its product offerings.
Wazi Vision, a Ugandan eyewear startup, has also raised an undisclosed amount of funding from Renew Capital.
Founded in 2016 by Brenda Katwesigye and Geogette Ochieng Ndabukiye, Wazi Vision provides affordable, high-quality, and fashionable eyewear to its customers in a market where regular eyewear is frequently prohibitively expensive and out of reach for the majority of consumers.
With the help of the investment from Renew Capital Angels, Wazi plans to expand its product line and enhance its distribution capacity in Kampala and beyond.
Venture news
Equator, a climate tech venture capital firm focused on sub-Saharan Africa, has secured an initial close of its first fund with $40 million in commitments from investors including BII, the Global Energy Alliance for People and Planet (GEAPP), the Shell Foundation, FMO, Norfund and DOEN Participaties.
The firm is looking to fund seed to Series A startups in the energy, agriculture, and mobility sectors, with a focus on technical founders with domain expertise in these sectors, with the ultimate goal of addressing the impact of climate change on income inequality in Africa. Throughout the fund’s life cycle, it hopes to make up to 15 investments in round sizes of $10 million or less.
Novastar Ventures, a Pan-African venture capital firm, has launched the Africa People + Planet Fund, with a $25 million equity investment from the US International Development Finance Corporation (DFC). Novastar aims to raise over $200 million, making it one of the largest funds in the region.
The fund will back clean utilities, clean construction technologies, electric mobility, smart logistics, the circular economy, and alternative materials. Novastar also plans to support climate techs that use innovative business models to deploy regenerative forestry, agriculture, and aquaculture, biofuels, and biochar that protect biodiversity, improve soil health and capture carbon, while generating more opportunities for smallholder farming.
Partnerships
EthSwitch, the Ethiopian national payment switch owned entirely by Ethiopian banks, is collaborating with Mastercard to provide a faster, more secure digital payment solution for the country’s financial institutions.
The partnership would play an important role in advancing Ethiopia’s financial system and supporting the economy by improving the flow of remittances in the country, with customers having access to instant payout capabilities and secure transactions.
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