QED makes its first investment in Africa, backing Nigerian fintech TeamApt in a $50M+ deal – TechCrunch

QED Investors, a US fintech-focused venture capital firm, has led a new investment in TeamApt, a Nigerian fintech offering business payments and banking platforms. The investment was over $50 million, according to sources familiar with the matter, though neither QED nor TeamApt would confirm the figure.

Existing investors from the company’s Series B last year (Crunchbase values ​​it at $30M+) — Lightrock, BII, and Novastar Ventures — all participated in this round.

While TeamApt would not describe any ‘paper’ for this latest round, it could probably 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 efforts opportunistically and want to make sure that the market context, business cash needs and investor profile align with our strategic growth views,” said the company’s Tosin Eniolorunda when asked if the current market downturn impacted the company’s Series C fundraising. efforts originally planned for this year. “Given the overall cautious market environment, we were not in active fundraising mode. As a for-profit company, we didn’t need the money, but we were happy to take the opportunity to add a new high-profile investor.”

The final piece of the puzzle

With almost $5 billion in assets under management (AUM) and a recently closed seventh fund of $1.05 billion, QED has backed over 180 companies (of which 27 are unicorns). In a move rarely made by Western VCs, QED announced the hiring of Gbenga Ajayi AND Chidinma “Chid” Iwueke to lead its investments in Africa this January. Nigel Morrisco-founder and managing partner of the firm, in an interview with TechCrunch, said that Africa was the final piece of the puzzle for transforming QED into a global VC firm specializing in fintech.

TeamApt operates one of Nigeria’s largest business banking and payment platforms and processes an annual run-rate transaction value of $100 billion through its Moniepoint and Monnify products. Moniepoint now serves 400,000 small and medium businesses across Nigeria, allowing them to access various features to manage operations: 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 took four years to build before raising a venture round in 2019, but has grown 300% annually to build one of the largest fintechs in Africa (in revenue and market cap ) – and it’s profitable. The company generated over $100 million in annual revenue last year and saw its valuation jump nearly fourfold from its previous round at the price, according to sources.

“From our bootstrapping days, we built products where we could see positive unit economics from day one, which has continued to be reflected in our profitability,” the CEO said in an emailed response to TechCrunch. “This has put us in the realm of the few attractive cash flow positive growth companies – even as we continue to grow triple digits year over year while at the same time expanding our margins.”

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

QED is also a recognized 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 TeamApt’s lead investor profile. In an interview in January, QED said it expects future portfolio companies to “take advantage of its fintech specialization, operational expertise and willingness to roll up its sleeves” to build and scale financial products for Africa’s needs, which is precisely at the core of TeamApt. business.

Nigeria is leading the way in large-scale adoption of digital payments across Africa, with over $800 billion in outdated digital transactions for the first four months of this year. It’s a huge fintech market, with countless companies offering multiple services across the country, with the likes of Flutterwave, Chipper Cash and OPay reaching unicorn status. TeamApt, in subsequent rounds, may present QED with the opportunity to create another unicorn.

“I am proud to bring Africa to QED and QED to Africa. I couldn’t think of a better way to enter the continent than with our investment in TeamApt,” Gbenga Ajayi, QED Investors partner and Head of Africa, said in a statement. “Tosin and his team have built sustained an impressive payment and delivery network across Nigeria over the past five years. Their strong and positive unit economics, together with a deep customer focus, will enable them to continue to build a network even more expansive.”

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

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