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

QED Investors, a US fintech-focused venture capital firm, has led a new investment in TeamApt, a Nigerian fintech company that provides business payments and banking platforms. According to sources familiar with the situation, the investment was more than $50 million, although neither QED nor TeamApt would confirm this figure.

Existing investors from the company’s Series B last year (Crunchbase pegs it at $30 million) — Novastar Ventures (co-lead), Lightrock and BII — all participated in this round.

Although TeamApt does not assign any “letter” to this latest round, it could perhaps be described as a preliminary round of Series C, asOur sources say the company is still in the market to build a Series C next year.

“We always take an opportunistic approach to our fundraising efforts and want to make sure that the market context, business cash needs and investor profile are aligned with our strategic growth outlook,” company spokesman Tosin Eniolorunda said when asked if the the current market downturn for Series C fundraising efforts originally planned for this year. “Given the general cautious market situation, we have not been in active fundraising mode. As a profitable company, we didn’t need the money, but we were happy to take the opportunity to add a new high-profile investor.”

The last 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 step rarely taken by Western venture capitalists, QED announced the hiring Gbenga Ajayi and Chidinma “Chid” Iwueke lead its investment in Africa this January. Nigel Morrisco-founder and managing partner of the firm, told TechCrunch that Africa is the final piece of the puzzle to transform QED into a global fintech venture capital firm.

TeamApt operates one of Nigeria’s largest payment and banking platforms and processes US$100 billion in annual transaction value through its Moniepoint and Monnify products. Moniepoint currently serves 400,000 SMEs across Nigeria, giving them access to a variety of operations management features: working capital, business expansion loans and business management tools such as expense management (business payment cards), accounting and bookkeeping solutions and insurance.

In TeamApt, QED finds a company that was in business for four years before raising a venture round in 2019, but has grown by 300% each year to create one of the largest fintech companies in Africa (by revenue and market cap) – and is profitable. The company generated more than $100 million in annual revenue last year, and its valuation has nearly quadrupled from its previous valuation, according to sources.

“Since our early days, we’ve built products where we’ve seen positive unit economics from day one, which continues to translate to our bottom line,” the executive said in an emailed response to TechCrunch. “This puts us in the realm of the few attractive companies with positive cash flow growth, even as we continue to grow at triple digits year over year while expanding our margins.”

Eniolorunda said this new round of funding will help TeamApt expand its credit offerings. The company’s loan portfolio is still small as it continues to lend from the balance sheet of its subsidiary microfinance bank. But as it expands its portfolio, the company plans to bring in multiple lending partnerships, including banks, development finance institutions and securitization structures, to access debt instruments.

QED is also a prominent credit operator and has helped develop strong credit functions for portfolio companies such as Brazil’s Nubank and India’s Jupiter, which Eniolorunda says fit the profile of TeamApt’s lead investors. In a January interview, QED said it expects future portfolio companies to “take advantage of its fintech expertise, operational expertise and willingness to roll up its sleeves” to build and scale financial products for Africa, which is what TeamApt is all about. business.

Nigeria is leading the way in large-scale adoption of digital payments across Africa, with digital transactions worth more than $800 billion annually in the first four months of this year. It is a large fintech market with countless companies providing numerous services across the country such as Flutterwave, Chipper Cash and OPay. In later rounds, TeamApt may give QED the opportunity to carve out another unicorn.

“I am proud to represent Africa in QED and QED in Africa. I couldn’t think of a better way to enter the continent than with our investment in TeamApt,” said Gbenga Ajayi, QED Investors Partner and Head of Africa. “Over the past five years, Tosin and his team have steadily built an impressive payment and distribution network across Nigeria. The division’s strong and positive economics combined with a deep customer focus will allow them to continue to build an even wider network.”

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

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