Djamo is one in every of a number of virtual banking startups concentrated on Africa’s underbanked. However in contrast to many that concentrate on massive markets like Nigeria, Egypt, or South Africa, Djamo has carved out a distinct segment in Francophone West Africa, particularly the Ivory Coast and, extra just lately, Senegal. It now serves over a million consumers throughout each nations.
The Y Combinator-backed fintech simply raised $17 million to extend its product suite for those retail consumers and the hundreds of small companies it has onboarded within the remaining two years.
The fairness spherical, the biggest ever for an Ivorian startup, surpasses Djamo’s $14 million Collection A in 2022 and displays persevered investor self belief in its project to make banking out there and inexpensive.
Co-founder and CEO Hassan Bourgi declined to percentage the brand new valuation however stated it has doubled because the remaining lift.
Bourgi based Djamo with leader product and technical officer Régis Bamba in 2020 to near the monetary get admission to hole in French-speaking African nations, the place few adults have financial institution accounts. Conventional banks within the area incessantly cater to the prosperous, leaving lots of the inhabitants reliant on cellular cash, a inexpensive way that incorporates the usage of telephone numbers to make monetary transactions.
Cellular cash has been instrumental in increasing monetary get admission to throughout Africa. As of 2022, 28% of adults in Sub-Saharan Africa had a cellular cash account, consistent with the Global Financial institution, and the area holds greater than part of the sector’s general. However that development has additionally created a ceiling.
Maximum cellular cash platforms be offering elementary services and products: cash-in, cash-out, P2P transfers, and invoice bills. Whilst helpful, they don’t release extra complicated monetary gear like credit score, investments, or long-term financial savings.
Djamo is positioning itself between cellular cash and standard banking. The startup provides the accessibility of cellular cash with the monetary intensity of a checking account, a identical playbook that Softbank-backed OPay and Transsion-owned PalmPay have used to scale to tens of tens of millions of shoppers in Nigeria.
Its goal is a rising phase of customers, most commonly more youthful consumers, who’ve outgrown cellular cash wallets however nonetheless to find conventional banks pricey, old-fashioned, or inaccessible, the founders say.
“Those customers are evolving,” stated Bourgi. “However they don’t wish to cross the place their folks went, into establishments with predatory pricing and aren’t tailored to the brand new technology of shoppers. And that is what we’re constructing, looking to change into the go-to financial institution for this large cohort of shoppers this is evolving now to extra complicated, wealth-building financing alternatives.”
Increasing product suite to fit call for
Since our remaining protection, Djamo has expanded past playing cards and peer-to-peer transfers. The Ivorian fintech now provides financial savings vaults, funding merchandise — due to the area’s first fintech-issued brokerage license — and salary-linked financial institution accounts, which Bourgi sees as vital to boosting buyer engagement.
Like many neobanks, Djamo draws banked customers who deal with it as a secondary account for smoother invoice bills and cellular cash integration. Nevertheless it’s the unbanked, tougher to turn on, who display better long-term possible. Those customers, who make up over 55% of Djamo’s base, incessantly deal with the app as their number one monetary provider.
Bourgi says 9 in ten customers who depend on Djamo as their primary account come from this phase. To achieve extra of them, Djamo has followed a hybrid method, combining its app with offline brokers who meet consumers in user to facilitate transactions, very similar to the cellular cash type now extra widely followed by way of fintechs around the continent.
Lately, most effective 5–10% of Djamo customers obtain salaries during the app. “The following segment for us,” Bourgi stated, “is determining easy methods to transfer from 10% to 50% of our customers getting their salaries paid at once into Djamo.”
In the meantime, Djamo could also be ramping up services and products for small companies—about 10,000 of them, lots of whom began as retail customers. In step with CTO Bamba, the startup now supplies bulk bills, fee hyperlinks, and QR code gear to lend a hand traders settle for and organize bills at once throughout the app.
The fintech generates income from service provider charges on on-line card purchases and a top rate tier plan, which 25% of customers pay for. Bamba provides that the corporate is exploring further income streams, together with lending and incomes curiosity on buyer deposits. It’s within the technique of securing licenses that can permit it to supply interest-bearing financial savings accounts and credit score merchandise.
Djamo’s founders say the corporate has grown income 5x since 2022 and processed greater than $4.5 billion in transactions since release.
With its fresh growth into Senegal, Djamo has entered a marketplace ruled by way of Wave, one in every of Africa’s greatest fintechs recognized for low cost cellular cash transfers. However somewhat than compete at once, Djamo positions itself as a complementary provider, providing a virtual banking revel in the place customers can retailer finances and get admission to extra complicated gear like financial savings, investments, and credit score.
Now a 250-person group, Djamo is having a bet that its new spherical of investment, led by way of pan-African, gender-focused VC Janngo Capital, will lend a hand it scale the ones services and products throughout French-speaking Africa.
“We’re overjoyed to steer the biggest VC spherical in Ivory Coast and double down on Djamo, a mission-driven fintech remodeling get admission to to monetary services and products throughout Francophone West Africa,” stated Fatoumata Bâ, founder and govt chair of Janngo Capital.
“In a area the place fewer than 25% of adults have get admission to to formal monetary services and products, and the place ladies are two times as more likely to be excluded, it is a important project. With ladies making up a 3rd of its customers, Djamo isn’t just ultimate the gender hole however unlocking financial alternative at scale.”
Different buyers collaborating within the spherical come with SANAD Fund for MSMEs (controlled by way of Finance in Movement), Partech, Oikocredit, Enza Capital, and Y Combinator.
Africa,virtual banking,Djamo,Fintech
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