It’s not every day a Zambian startup gets acquired or invested in—especially by another African startup. But for the sake of fintech, it’s happening today.
Earlier this year, Ghanaian fintech startup Zeepay announced it was on the lookout for USD 10 Mn in equity funding to expand to East and Southern Africa. Today, it has made good on one variable of that ambition; by investing in a Zambian mobile money service.
It’s not disclosed whether Zeepay has raised an equity round or not, but it has picked up a 51 percent stake in Mangwee—a wallet alternative that was launched in 2018—thus, becoming a major shareholder in the company.
Zeepay is a challenger fintech startup whose operations are said to be “changing the remittance narrative via fintech disruption”.
Founded to reduce the walking distance to a cash-withdrawing outlet in many parts of Africa—and enable people to receive remittances from money transfer firms like MoneyGram, Taptap, Small World, Ria, and Transfast, among others.
The service is currently live in more than 20 African markets, with plans to enter 9 new countries in the continent this year—apparently starting with Zambia.
Per an announcement in January, Zeepay is looking to replicate its services in Tanzania, Ethiopia, Burkina Faso, Gambia, and Madagascar.
By becoming a shareholder and strategic investor in Mangwee, Zeepay has opened a corridor through which it will enter other Southern African markets. Countries in the region—including Lesotho, Mozambique, Angola, Malawi, Namibia—form a major part of Africa’s USD 70 Bn remittance industry.
Disregarding predictions from global think tanks that remittance flows will drastically decline worldwide due to the pandemic, South Africa, Malawi and Zambia have seen money sent from the overseas increase. What’s more, these “Southern African” countries’ remittance flows show more resilience compared to other forms of financial services in the region.
Mangwee was initially built for Zambian students to use as virtual wallets, in one of the country’s efforts to foster financial inclusion while driving down the costs of mobile money services nationwide.
The costs of sending remittances to Zambia are on the mountaintop—the country was ranked among the costliest countries in the world to send money to from across borders. Plus, 40 percent of the nation’s population is still financially excluded
Zeepay—which processed 2.4 million transactions valued at USD 400 Mn across 10 markets in 2020—isn’t the only fintech with a taste for Zambia’s financial landscape.
Last October, Mukuru and WorldRemit tied their alliance tighter to expand their cash remittance services to Zambia, South Africa, Mozambique, Malawi, and Botswana.
The partnership between Zeepay and Mangwee is to achieve a purpose similar to the end goal of the WorldRemit-Makuru collaboration into Zambia; to reduce—or remove—the costs associated with sending money to and from the country.
Back home, Zeepay received an Electronic Money Issuer (EMI) license from the Bank of Ghana in April 2020. 5 months after that, the company joined hands with Visa to allow Africans in the diaspora to send money directly into Visa debit and prepaid cards in Ghana.
Last December, Zeepay closed a seed round of USD 940 K from GOODsoil, an Africa-focused early-stage VC firm founded in 2017. During the announcement of this funding, the startup said it was planning to launch in the United Kingdom in 2021.