October 6, 2015

As a sign of investors’ unquenchable interests for mobile technology or the technology-related industry in Africa, Paga, Nigeria’s mobile-payment company, said it recently raised $13 million from investors to expand its services across the continent.

The company said the funds raised through a Series B funding, which was led by technology focused-African private equity firm, Adlevo Capital, and other institutional and private investors including Omidya Network, Goodwill West Africa, Acumen Fund, Capricorn Investment group, and Jeremy Stoppelman, cofounder and CEO of Yelp and one of the early team member at Paypal, will provide the finance it needs to innovate as well as expand and strengthen its service offerings to agents and customers, including small and medium enterprises, to enable it to build a long-term sustainable network in Nigeria and across the continent.

Tayo Oviosu, founder and chief executive officer of Paga said the recent financing will help the company to continue to “build towards our vision and support the strengthening of our agent network. In addition, through our agent network today, …, we are actively working on partnerships with banks to offer our agent network for use by their customers.”

Mr. Oviosu added that Paga agents will act as “human ATMs and bring significant convenience to customers of the banks who need to deposit or withdraw cash from their bank accounts without traveling far or waiting in long lines. This will support the banks in achieving their critical goal of truly reaching the mass markets.”

The company, which mobile service offerings include money transfer and withdrawal, serves as an alternative to traditional brick and mortar banks for people without a regular bank account by providing an easy and convenient way for customers and retailers to conduct trade, pay bills, pay for goods online or at a retail store and conduct other mobile transactions though a secure payment system.

Most banks in Africa have branches in urban areas and as a result, regular bank services are often simply unavailable in the rural areas. Even in places with extensive banking system, some people still keep money under their mattress, which experts say adversely affect the economy.

The proliferation of mobile phone services around the continent, however, has opened a new way to extend financial services to people without a traditional bank account.

Since the emergence of mobile payment services like M-Pesa-a joint product of Vodafone/Safaricom mobile-phone company, the Commercial Bank of Africa and Faulu Kenya– in Kenya nearly a decade ago, companies like Pega are expanding the innovative use of modern information and communication technologies to provide affordable financial services to customers wherever there is a mobile signal.

Established in 2009, Paga has signed up more than 270,000 customers. Paga hopes to reach 16 million others. Holders of Paga accounts can use any mobile phone, regardless of network carrier, to deposit money for a beneficiary, which can be redeemed at any Paga agent across the country. Salaries can be paid electronically into a Paga account. Account holder also receive a debit cards, which are accepted at ATMs and by retailers.

Since its launched, Paga has undertaken a multi-stakeholder approach to maximize its networks by partnering with traditional and alternatives financial institutions, including banks and microfinance institutions, to offer which has led it to become one of the leading mobile payment services systems in Nigeria.

Its mobile application and online gateway is free to retailers and merchants to integrate into their platform to collect payment.

Speaking about its investment in Paga, Adlevo Capital Managing Partner Folabi Esan said his firm is “very excited” about its investment in Paga and the progress the mobile company has made. Since it initial investment  in 2012, the mobile company has experienced an impressive  annual growth rate of about 150 percent.

“Page’s sustained leading position in a competitive markets a testament to the strength of their team- and I think there’s even more to come as they unlock other areas of the business. I’m confident in Paga’s ability to drive growth of their sector in the coming years and continue to have a significant positive impact on the Nigerian economy,” said Mr. Esan.

Global law firm Norton Rose Fulbright LLP advised Paga’s latest Series B investment round.

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