Africa-Focused Fintech Firm Raises $40M From Chinese Backers, Launches In Nigeria

Written by Peter Pedroncelli
Fintech firm
Chinese investors including a smartphone maker popular in Africa have invested $40 million in PalmPay, a U.K.-based fintech firm launching in Nigeria. Fintech firm PalmPay’s senior marketing manager Damilola Owolabi speaks at the company’s Nigerian launch, Nov. 14, 2019. Image: PalmPay

Chinese investors including smartphone maker Tecno have invested $40 million in PalmPay, a U.K.-based fintech firm that wants to dominate African markets.

Focused on Africa, PalmPay has launched in Nigeria to target its competitive fintech market, according to MobileWorldLive.

PalmPay offers mobile-based financial services including bill payments, rewards and discounted airtime.

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Chinese investors back Africa-focused fintech firm

The $40 million investment was led by Shenzhen-based Chinese phone-maker Tecno, a subsidiary of Transsion, with participation from Chinese internet tech firm NetEase and Taiwanese wireless hardware firm Mediatek.

Tecno is the second most popular smartphone make in Africa with 20.2 percent of market share, the International Data Corporation reports.

PalmPay is already operating in Ghana. It is expected to reach additional markets in 2020, according to PalmPay CEO Greg Reeve.

By entering the competitive Nigerian market, PalmPay has targeted a country with several successful fintech contenders in the race to be Africa’s largest financial services platform.

In November 2019, Visa paid $200 million for a 20 percent stake in Nigerian digital payment firm Interswitch, confirming its status as a tech unicorn.

Lagos-based Interswitch has plans to list on the London and Nigerian stock exchanges in 2020.

Nigerian payment solutions firm Paga also has plans to list in London in the next three or four years. The company has raised $34.7 million over four rounds since 2010, according to Crunchbase.

Lagos-based payments firm Paystack has an office in San Francisco. It was the first Nigerian company to be accepted into Silicon Valley accelerator Y Combinator and has raised $11.7 million in funding since its launch in 2016.

One advantage that PalmPay says it has over its rivals in the Nigerian market is a partnership with mobile brands Tecno, Infinix and Itel — all owned by Transsion — to pre-install PalmPay’s app on 20 million phones a year beginning in 2020, according to Mobileworldlive.

PalmPay has also partnered with Visa to offer the credit card giant’s products to users within the PalmPay mobile wallet, Techcrunch reports.