A fintech from Ivory Coast — a part of one of the economically challenged and financially fragmented areas on the planet — has raised funding for an bold objective: to grow to be the “Stripe for Francophone Africa.” HUB2, because the startup is named, already works with some 55 neobanks, cost firms, remittance firms and cryptocurrency suppliers, and it has now picked up $8.5 million to develop that checklist, and to up its recreation in its tech stack.
Pan-African early-stage investor TLcom Capital is main the Sequence A funding, with FMO, Enza Capital, Bpifrance, and Eric Barbier, the founding father of Thunes, among the many longer checklist of buyers.
Ashley Gauzere, a former telecom engineer who beforehand labored for Orange Africa within the Center East, based HUB2 in 2019 after noticing the actual challenges within the area’s e-commerce business.
Retailers seeking to work with cell banking suppliers (shoppers’ and companies’ cellphone accounts double as financial institution accounts in lots of creating nations) typically discover it laborious to promote regionally since cell cash operators and banks in Francophone African nations function in silos attributable to laws and variances throughout banking programs. On the opposite facet of the transaction, reaching last-mile shoppers for a few of these monetary establishments was troublesome attributable to low banking penetration. Cost points like fragmentation, interoperability gaps, and assortment challenges are widespread.
Impressed by Stripe, the U.S. juggernaut now valued at $70 billion, Gauzere noticed a possibility to construct an providing that would knit collectively advanced operations behind an API that firms may use to make it simpler for them to take funds and handle transactions. (Gauzere just isn’t the one one: The founders of Nigeria’s Paystack had ambitions to grow to be a Stripe-like supplier for English-speaking Africa; that enterprise scaled sufficient to finally get the eye of Stripe, which acquired it.)
“The one challenge I needed to unravel in French-speaking Africa after 20 years in telecom and seeing the necessity for high-quality, interoperable cost options was creating infrastructure and unifying funds within the area like a Stripe-like platform,” he remarked.
HUB2 claims to supply “complete protection and seamless integration throughout cost strategies,” partnering with cell cash suppliers like Wave, Orange, MTN, Moov, Free, and T-Cash, and it simplifies funds by enabling fintechs to gather cell cash, financial institution transfers, card funds, and cryptocurrency by way of a single API.
Concentrating on cost suppliers and fintechs as clients was not HUB2’s first technique. It wasn’t even its second technique.
Initially, Gauzere thought the massive alternative was in focusing on impartial e-commerce retailers instantly.
It discovered that the market was nonetheless too small, nonetheless, so it shifted focus to massive corporates within the area seeking to transition from money to digital funds. That led the corporate to develop its companies to incorporate cost collections by way of cell cash, financial institution playing cards, and point-of-sale.
For over a 12 months, HUB2 adopted that technique and centered on the insurance coverage sector, which then led to consideration from buzzy fintechs like Ivorian YC-backed Djamo. That led to the corporate pivoting a 3rd time, serving fintechs completely.
At the moment, HUB2 operates because the spine for 55 fintechs throughout French-speaking Africa — they embrace Julaya, Onafriq, NALA, and CinetPay — offering cost infrastructure for these firms to energy their operations. This alignment with fintechs, which at the moment are chargeable for 98% of its volumes, helped HUB2 obtain product-market match and drove its development during the last three years.
The cost aggregator is on monitor to course of €1 billion in transaction quantity (TPV) this 12 months — a marked improve from the €70 million it dealt with in 2022 — fueled by constant 15% month-over-month development in each TPV and income, which comes from take charges on these volumes.
“We have now a really horizontal play, and our objective is to supply all cost strategies — from cell cash and playing cards to banking and cryptocurrencies — overlaying the whole footprint for fintechs,” defined Jean-Rémi Kouchakji, who joined HUB2 as co-CEO in 2023.
He added that focus is essential for it at this stage. “If you wish to provide every part with the appropriate licenses, good compliance, and technical excellence, verticalizing every part isn’t precisely possible,” he mentioned.
However because it scales, the corporate should still flip to serving smaller companies in the long term.
Small and medium enterprises (SMEs) account for 90% of companies in Africa, making them a vital phase that can not be missed. It could additionally put it in step with competitors. Paystack and Flutterwave, for instance, have scaled by addressing the wants of enterprise purchasers and small companies, a mannequin HUB2 may emulate to develop its attain.
Equally, the five-year-old fintech is ramping up efforts to prop up its cost infrastructure on the whole.
In line with co-CEO Ashley Gauzere, cell cash has pushed most of HUB2’s transactions, with much less uptake for different cost strategies similar to bank cards, financial institution transfers, and cryptocurrency, exhibiting that its concept of a totally interoperable ecosystem remains to be creating.
To deal with this, HUB2 will roll out cross-border cost options, introduce stablecoin-based remittance companies, and develop its card cost capabilities by deepening its integration with CyberSource, Visa’s cost processing platform, throughout extra African markets. Presently, it operates in six Francophone African nations: Senegal, Burkina Faso, Benin, Togo, and Cameroon, however is focusing on full regional protection inside the subsequent two years.
The five-year-old fintech has a 35-person crew throughout three places of work in France, Ivory Coast, and Mauritius.
“We’re proud to work with HUB2 as the corporate extends its attain throughout Francophone Africa,” mentioned Eloho Omame, accomplice at TLcom Capital. “HUB2’s achievements within the area, mixed with TLcom’s monitor file in Anglophone markets, create a strong partnership that can make digital funds extra accessible throughout the continent.”
