QED makes first African investment, backing Nigerian fintech TeamApt in $50+ million deal – TechCrunch

QED Investors, an American venture capital firm focused on fintech, has led a new investment in TeamApt, a Nigerian fintech that provides business payments and banking platforms. The investment exceeded $50 million, according to sources familiar with the matter, although neither QED nor TeamApt confirmed the figure.

The company’s existing Series B investors last year (Crunchbase pegs it at more than $30 million) — Novastar Ventures (co-director), Lightrock and BII — participated in this round.

While TeamApt wouldn’t prescribe a “letter” to this latest round, perhaps it can be described as a pre-Series C round because sOur sources say the company is still in the market to raise a Series C next year.

“We always approach our fundraising effort opportunistically and want to make sure that the market context, the company’s cash needs and the investor profile match our strategic growth visions,” he said. said the company’s Tosin Eniolorunda when asked if the current market downturn affected the company’s Series C fundraising. efforts initially planned for this year. “Given the overall cautious market environment, we were not in active fundraising mode. As a profitable company, we did not need the cash, but we were happy to take the opportunity to add a new high-profile investor profile”.

Final piece of the puzzle

With nearly $5 billion in assets under management (AUM) and a recently closed seventh fund of $1.05 billion, QED has backed more than 180 companies (of which 27 are unicorns). In a move rarely made by Western VCs, QED announced the hiring of Gbenga Ajayi i Chidinma “Chid” Iwueke to lead its investments in Africa this January. Nigel Morristhe company’s co-founder and managing partner, in an interview with TechCrunch, said Africa was the final piece of the puzzle to transform QED into a global venture capital firm specializing in fintech.

TeamApt operates one of the largest banking and business payment platforms in Nigeria and processes an annual transaction value of $100 billion through its Moniepoint and Monnify products. Moniepoint now serves 400,000 small and medium enterprises across Nigeria, giving them access to various features to manage operations: working capital, business expansion loans and business management tools such as expense management (cards of commercial payment), accounting and bookkeeping solutions and insurance.

In TeamApt, QED finds a company that bootstrapped for four years before raising a venture round in 2019, but has grown 300% annually to build one of Africa’s largest fintechs (by revenue and market cap) and it is profitable. According to sources, the company generated more than $100 million in annualized revenue last year and its valuation increased nearly fourfold from its previous pricing round.

“Since our startup days, we’ve built products where we can see positive unit economics from day one, which has continued to be reflected in our profitability,” the CEO said in an email response to TechCrunch. “This has placed us in the realm of the few attractive hyper-growth companies with positive cash flow, even as we continue to grow at triple digits year over year, while expanding our margins.”

Eniolorunda said this new round of funding would help TeamApt expand its credit offering. The company’s loan portfolio is still small as it continues to lend from the balance sheet of its microfinance banking subsidiary. But as its portfolio expands, the company plans to tap multiple lending associations, including banks, development finance institutions and securitization structures, to access debt facilities.

QED is also a renowned credit operator and has helped develop strong credit roles for portfolio companies such as Brazil’s Nubank and India’s Jupiter, which Eniolorunda says fit TeamApt’s lead investor profile. In a January interview, QED said it expects the upcoming portfolio companies to “leverage their fintech expertise, operational experience and willingness to crawl” to create and scale financial products for Africa’s needs, which it is precisely the core of TeamApt. business

Nigeria is leading the way in large-scale adoption of digital payments across Africa, with more than $800 billion in annual digital transactions in the first four months of this year. It’s a huge fintech marketplace, with countless companies offering numerous services across the country, including Flutterwave, Chipper Cash, and OPay. TeamApt, in later rounds, may present QED with the opportunity to mint another unicorn.

“I am proud to bring Africa to QED and QED to Africa. I can think of no better way to enter the continent than with our investment in TeamApt,” said Gbenga Ajayi, Partner at QED Investors and Head of Africa, in a statement “Tosin and his team have steadily built an impressive payment and distribution network in Nigeria over the past five years. Their strong and positive unit economics, coupled with a deep customer focus, will enable them to continue to build an even bigger network expansive”.

Meanwhile, as discussed last year, TeamApt’s pan-African expansion game is still in motion, Eniolorunda said; the company aims for its first wave of international expansion on the continent in the coming months.

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