Ivorian payments-led fintech startup Julaya has extended its pre-Series A round by $5 million. The company, which facilitates B2B payments for businesses in French-speaking West Africa, primarily through mobile money channels, has raised a total of $7 million in its funding round.
In 2019, West Africa reported the most live mobile money services in any region, with 56 million active accounts. In Côte d’Ivoire, one of Francophone Africa’s largest mobile money markets, 75% of the population owns a mobile money account, compared to 20% who have a bank account. That is why Julaya launched its services in the West African country and has since expanded to Senegal where the penetration of the mobile market is about 80% as well as other countries in the UEMOA (West African Economic and Monetary Union) region, where a lot of mobile money is also used.
Small to large enterprises in these countries can use the Julaya platform to make bulk payments to other businesses and their unbanked employees through existing mobile money channels. But they now have access to more services, such as the startup’s prepaid card — issued by Mastercard — for managing business expenses. The cards are tailored to the travel needs of companies, other online expenses and the easy import of transactions into their accounting systems, CEO Mathias Leopoldie told londonbusinessblog.com in an interview.
“Our sense of our strategy with the cards is to provide a full range of services. Because if you only have cards, I don’t think you can build a great startup with a lot of traction like you would like, say in the US,” said the CEO, who founded the company with Charles Talbot. “The card payment industry, except South Africa, maybe Nigeria and a little bit in Egypt, is evolving and while you might be able to grow a business with that, in our region it’s almost impossible [Francophone Africa].”
Léopoldie stated that offering cards – most of which are physical (at customer request) – is not Julaya’s main strategy in terms of revenue growth. It’s a switching cost strategy that he says sets the fintech apart from competitors like YC-backed, which see cards as the main driver.
More than 40% of Julaya’s 500 small and medium-sized businesses (SMEs), startups, large corporations and government agencies use the business expense management feature. While the main volumes come from medium to large enterprises, the fintech has surprisingly seen more adoption from its traditional and non-digitized small customers, Léopoldie noted.
In the past year, the Ivorian-French startup has also expanded its product range with a “Cash & Collect” solution that enables “fast and secure” money collection, especially in the FMCG sector. Here, companies can deposit their money from physical and field sales into their Julaya account through a mobile money agent office without going to a bank.
Last July, Léopoldie said the fintech processed more than $1.5 million a month. Those numbers have quadrupled to more than $7.5 million, with identical sales growth of more than 500% year-over-year. Brands like Jumia and Sendy are some of Julaya’s customers.
European venture capital fund Speedinvest led Julaya’s pre-Series A renewal round. EQ2 Ventures, Kibo Ventures, angel syndicates Unpopular Ventures and Jedar Capital, existing investors Orange Ventures, Saviu, 50 Partners and Ivorian business angel Mohamed Diabi and professional football player Édouard Mendy also invested in the round.
Mendy’s participation – his first in Africa and the second worldwide – highlights the growing involvement of athletes in the African venture capital scene. This week londonbusinessblog.com presented Byld Ventures, a $15 million fund focused on African fintechs. A notable observation from the news was the number of athletes involved as limited partners of the company; some have also made direct investments from various reports. Mendy is African unlike the others who are mainly Europeans. While he may be one of the first African athletes to support startups, Léopoldie reckons there will be more examples in the near future.
“I think he’s a little ahead of the curve. We’re seeing football stars, or high net worth individuals in the sports industry, starting to see that they need to invest in venture capital for two reasons. The first is that although it’s a risky asset, the great And secondly, they should use their image to show that they not only care about their sports career, but also want to be an inspiration to their home country. It made sense for Édouard Mendy because he is Senegalese.”
Julaya also received investments from her CFO and country manager in Senegal. The proceeds from this funding round will help the fintech in further expansion plans in French-speaking West Africa as it plans to open offices in Benin, Togo and Burkina Faso, hire talent and drive product development.
Enrique Martinez-Hausmann, principal at lead investor Speedinvest, said the company’s portfolio business is changing the way companies operate in a complex payments landscape in the French-speaking area, which also includes well-known players like CinetPay and Bizao. “Looking ahead, the potential of Julaya’s technology goes far beyond its payment capabilities, with the potential to become a close banking partner for businesses in West Africa,” noted Martinez-Hausmann.