UK-based and Africa-focused payments company PawaPay has closed an approx. €7.6 million seed funding round to scale its operational presence, recruit talent and expand into new markets. The round was co-led by British fund 88mph and China-based MSA Capital, with participation from Zagadat Capital, Kepple Ventures and Vunani Capital.
According to the World Bank’s 2015 figures, there are over 350 million unbanked individuals in sub-Saharan Africa. Most unbanked people rarely earn minimum wage in their respective countries, so it’s difficult for banks to make money off these individuals, and opening a bank account involves many unattractive KYC (Know Your Customer) processes for this population.
But one thing is for sure: The unbanked have mobile phones, and telecom operators using proxies have bypassed the banks to create their own systems allowing people to transfer money securely using mobile phones – all for low or no transfer fees. This means that individuals with mobiles can still access basic financial services, like savings and transfers.
PawaPay explains that 66% of global mobile money transactions are made in Sub-saharan Africa. Mobile money is the preferred money transfer method for Sub-Saharan Africans and it’s still growing – a lot. Last year alone, registered mobile money accounts in the Sub-Saharan region grew by 11.9%.
Founded in 2020, PawaPay’s pawaPay helps global companies accept payment on African consumers’ terms – mobile money. Its API allows merchants to access the telecom operators’ mobile money systems, to receive and send payments to millions of mobile money accounts. PawaPay handles local operations, compliance, regulatory cover and bank accounts, making it simple to receive payments in a new market. Simply put, it takes the technical integrations from telecom operators like AirtelTigo, Econet, MTN, Safaricom, Orange and Vodafone and collapses them into one API for businesses.
PawaPay spun off last year from online sports betting company betPawa. The company is led by CEO Nikolai Barnwell, betPawa’s former head of New Markets, Africa, who explained recently to Techcrunch: “We’re making a very heavy bet on the rise of mobile money and all the complexities that arise out of mobile money and all the infrastructure that needs to be built around payments with mobile money at its core”
“And the way we’re looking at the continent, we’re looking at adoption rates for mobile money growing at an insane speed. It has become quite obvious that this is a very significant financial infrastructure and there’s a lot of it that’s been missing if you want to work serious volume and businesses on mobile money.”