QED Buyers, a U.S. fintech-focused enterprise capital agency, has led a brand new funding in TeamApt, a Nigerian fintech that gives enterprise funds and banking platforms. The funding was over $50 million, based on sources aware of the matter, although neither QED nor TeamApt would verify the determine.
Present buyers from the corporate’s Collection B final yr (Crunchbase pegs it at $30 million+) — Novastar Ventures (co-lead), Lightrock and BII — all participated on this spherical.
Whereas TeamApt wouldn’t prescribe any “letter” to this newest spherical, it may well maybe be described as a pre-Collection C spherical as a result of sources say the corporate continues to be available in the market to boost a Collection C subsequent yr.
“We all the time method our fundraising effort opportunistically and need to make sure that the market context, money wants of the enterprise and investor profile match our strategic development views,” mentioned the corporate’s Tosin Eniolorunda when quizzed whether or not the present market downturn affected the corporate’s Collection C fundraising efforts initially deliberate for this yr. “Given the overarching cautious market surroundings, we weren’t in lively fundraising mode. As a worthwhile firm, we didn’t want the money, however we had been completely happy to take a chance so as to add a brand new high-profile investor.”
Remaining piece of the puzzle
With virtually $5 billion in property below administration (AUM) and a lately closed $1.05 billion seventh fund, QED has backed greater than 180 firms (of which 27 are unicorns). In a transfer not often made by Western VCs, QED introduced the hiring of Gbenga Ajayi and Chidinma “Chid” Iwueke to steer its investments in Africa this January. Nigel Morris, the agency’s co-founder and managing companion, in an interview with Fintech, mentioned Africa was the ultimate piece of the puzzle for remodeling QED into a world fintech-specialist VC agency.
TeamApt operates one in every of Nigeria’s largest enterprise funds and banking platforms and processes a $100 billion annualized run-rate transaction worth by way of its merchandise Moniepoint and Monnify. Moniepoint now serves 400,000 small and medium-sized companies throughout Nigeria, permitting them to entry varied options to handle operations: working capital, enterprise enlargement loans and enterprise administration instruments equivalent to expense administration (enterprise funds playing cards), accounting and bookkeeping options and insurance coverage.
In TeamApt, QED finds an organization that bootstrapped for 4 years earlier than elevating a enterprise spherical in 2019 however has grown 300% yearly to construct one of many largest fintechs in Africa (in income and market cap) — and is worthwhile. The corporate generated over $100 million in annualized income final yr and noticed its valuation soar virtually 4 instances from its earlier priced spherical, based on sources.
“From our bootstrapping days, we constructed merchandise the place we will see optimistic unit economics from day one, which has continued to be mirrored in our profitability,” the chief government mentioned in an electronic mail response to Fintech. “This has put us within the realm of the few enticing cash-flow-positive hyper-growth firms — whilst we proceed rising at triple digits year-on-year, whereas on the identical time increasing our margins.”
Eniolorunda mentioned this new financing spherical would assist TeamApt widen its credit score choices. The corporate’s lending portfolio continues to be small because it continues to lend from the steadiness sheet of its microfinance financial institution subsidiary. However as its portfolio expands, the corporate plans to leverage a number of lending partnerships, together with banks, improvement finance establishments and securitization buildings, to entry debt amenities.
QED can be a famend credit score operator and has helped develop robust credit score features for portfolio firms equivalent to Brazil’s Nubank and India’s Jupiter, which, based on Eniolorunda, match TeamApt’s lead investor profile. In a January interview, QED mentioned it expects upcoming portfolio firms to “benefit from its specialization in fintech, operational experience and willingness to roll up its sleeves” to construct and scale monetary merchandise for Africa’s wants, which is exactly on the core of TeamApt’s enterprise.
Nigeria is main the best way in widescale adoption of digital funds throughout Africa, with over $800 billion in digital transactions annualized for the primary 4 months of this yr. It’s a big fintech market, with numerous firms offering quite a few companies throughout the nation, equivalent to Flutterwave, Chipper Money and OPay. TeamApt, in subsequent rounds, could current QED with the chance to mint one other unicorn.
“I’m proud to convey Africa to QED and QED to Africa. I couldn’t consider a greater solution to enter the continent than with our funding in TeamApt,” mentioned Gbenga Ajayi, QED Buyers companion and head of Africa, in an announcement. “Tosin and his group have steadily constructed a formidable cost and distribution community throughout Nigeria over the previous 5 years. Their robust and optimistic unit economics, coupled with a deep buyer focus, will allow them to proceed to construct out an much more expansive community.”
In the meantime, as mentioned final yr, TeamApt’s pan-African enlargement play continues to be in movement, mentioned Eniolorunda; the corporate is concentrating on its first wave of worldwide enlargement throughout the continent within the coming months.