PAYMENT STARTUP PalmPay LAUNCHES IN NIGERIA ON A $40M ROUND LED BY TRANSSION
An African based payment startup PalmPay was launched yesterday after the company raised $40 million seed round led by Transsion – a Chinese mobile-phone maker. Prior to this development, it was reported that the startup (PalmPay) had piloted its mobile fintech services in Nigeria since July before it was officially launched in Lagos yesterday.
The investment led by Trassion actually came through its subsidiary, Transsion’s Techno coupled with other participants, which includes Taiwanese wireless comms hardware firm Mediatek, and China’s NetEase were confirmed, active participants.
Meanwhile, it will surprise you of the startup’s ambition – the company stated that its primary goal is to become Africa’s largest financial service platform. And to achieve this, PalmPay entered a strategic partnership with mobile brands Infinix, Techno, and Itel which will see these mobile brands pre-install PalmPay’s app on 20 million phones next year (2020).
The startup (PalmPay) is also offering 10% cashback on bank transfer rates as low as 10 Naira. This was confirmed as its UK headquarter venture which was funded with a Chinese seed investment – will practically offer a package of mobile-based financial services, and this will include no-fee payment options, rewards programs, bill pay, and not excluding discounted airtime.
Prior to the launch of the payment startup PalmPay, it was also figured out that the startup received its approval the same month it began to pilot its mobile fintech from the Central Bank of Nigeria, as a licensed mobile money operator. Also, at the period of its pilot phase, the payments platform processed 1 million transactions via 100,000 registered users on its platform, according to reports.
But with this development, it’s also understood the startup’s payments focus meant entering Africa’s most promising digital sector, and it all boils down to competing in this crowded and competitive sector of continent’s largest economy, Nigeria.
Responding to this development, the CEO of PalmPay ‘Greg Reeve’ stated that PalmPay will use the $40 million seed funding to grow its financial services business in Ghana, which implies in addition to Nigeria. He also made it clear that the payments startup has plans to expand to other countries in 2020.
The enhancement of the continent’s mobile-connectivity profile has turned the whole scenario into an opportunity for mobile-based financial products and services.
According to statistics, the continent’s 1.2 billion people is seen as a contributing factor which represents the largest share of the world’s population, yet with few and functional banks on a global scale. This is also why hundreds of startups are descending on the continent’s fintech space, in a bid to offer scalable solutions for their financial needs.
Weighing up options and what lies ahead, the CEO of PalmPay ‘Greg Reeves’ made it clear he is hopeful that the company will compete in Nigeria and across Africa based on several strategic advantages. This is viewed from Tecno partnership and Transsion support, adding that:
“On channel and access, we are going to be pre-installed on all Tecno phones. You’re will find us in the Tecno stores and outlets. So we get an immediate channel and leg up in any market we operate in”.
It was also figured out that the owner of Tecno and PalmPay led Transsion – core investor and the largest seller of smartphones in Africa, with a manufacturing facility based in Ethiopia. Two months ago, precisely in September, the company raised about $400 million in a Shanghai IPO and intends to spend $300 million on new R&D and manufacturing capability in Africa and beyond.
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