QED makes its first African funding, backs Nigeria’s TeamApt

QED Investors, a U.S. fintech-focused enterprise capital agency, has led a brand new funding in TeamApt, a Nigerian fintech that gives enterprise funds and banking platforms. The funding was over $50 million, in response to sources accustomed to the matter, although neither QED nor TeamApt would verify the determine.

Present buyers from the company’s Series B last year (Crunchbase pegs it at $30 million+) — Novastar Ventures (co-lead), Lightrock and BII — all participated on this spherical.

Whereas TeamApt wouldn’t prescribe any “letter” to this newest spherical, it may well maybe be described as a pre-Collection C spherical as a result of sources say the corporate continues to be out there to lift a Collection C subsequent 12 months. 

“We all the time method our fundraising effort opportunistically and need to make certain the market context, money wants of the enterprise and investor profile match our strategic progress views,” mentioned the corporate’s Tosin Eniolorunda when quizzed whether or not the present market downturn affected the corporate’s Collection C fundraising efforts initially planned for this year. “Given the overarching cautious market surroundings, we weren’t in energetic fundraising mode. As a worthwhile firm, we didn’t want the money, however we had been glad to take a chance so as to add a brand new high-profile investor.”

Ultimate piece of the puzzle

With virtually $5 billion in belongings underneath administration (AUM) and a recently closed $1.05 billion seventh fund, QED has backed greater than 180 corporations (of which 27 are unicorns). In a transfer hardly ever made by Western VCs, QED introduced the hiring of Gbenga Ajayi and Chidinma “Chid” Iwueke to guide its investments in Africa this January. Nigel Morris, the agency’s co-founder and managing accomplice, in an interview with TechCrunch, mentioned Africa was the ultimate piece of the puzzle for remodeling QED into a world fintech-specialist VC agency.

TeamApt operates one among Nigeria’s largest enterprise funds and banking platforms and processes a $100 billion annualized run-rate transaction worth by way of its merchandise Moniepoint and Monnify. Moniepoint now serves 400,000 small and medium-sized companies throughout Nigeria, permitting them to entry varied options to handle operations: working capital, enterprise enlargement loans and enterprise administration instruments comparable to expense administration (enterprise funds playing cards), accounting and bookkeeping options and insurance coverage. 

In TeamApt, QED finds an organization that bootstrapped for 4 years earlier than raising a venture round in 2019 however has grown 300% yearly to construct one of many largest fintechs in Africa (in income and market cap) — and is worthwhile. The corporate generated over $100 million in annualized income final 12 months and noticed its valuation bounce virtually 4 instances from its earlier priced spherical, in response to sources. 

“From our bootstrapping days, we constructed merchandise the place we are able to see optimistic unit economics from day one, which has continued to be mirrored in our profitability,” the chief government mentioned in an e-mail response to TechCrunch. “This has put us within the realm of the few engaging cash-flow-positive hyper-growth corporations — whilst we proceed rising at triple digits year-on-year, whereas on the identical time increasing our margins.”

Eniolorunda mentioned this new financing spherical would assist TeamApt widen its credit score choices. The corporate’s lending portfolio continues to be small because it continues to lend from the steadiness sheet of its microfinance financial institution subsidiary. However as its portfolio expands, the corporate plans to leverage a number of lending partnerships, together with banks, improvement finance establishments and securitization buildings, to entry debt amenities. 

QED can also be a famend credit score operator and has helped develop sturdy credit score features for portfolio corporations comparable to Brazil’s Nubank and India’s Jupiter, which, in response to Eniolorunda, match TeamApt’s lead investor profile. In a January interview, QED mentioned it expects upcoming portfolio corporations to “benefit from its specialization in fintech, operational experience and willingness to roll up its sleeves” to construct and scale monetary merchandise for Africa’s wants, which is exactly on the core of TeamApt’s enterprise. 

Nigeria is main the best way in widescale adoption of digital funds throughout Africa, with over $800 billion in digital transactions annualized for the primary 4 months of this 12 months. It’s a big fintech market, with numerous corporations offering quite a few companies throughout the nation, comparable to Flutterwave, Chipper Cash and OPay. TeamApt, in subsequent rounds, could current QED with the chance to mint one other unicorn.

“I’m proud to convey Africa to QED and QED to Africa. I couldn’t consider a greater technique to enter the continent than with our funding in TeamApt,” mentioned Gbenga Ajayi, QED Traders accomplice and head of Africa, in a press release. “Tosin and his group have steadily constructed a formidable cost and distribution community throughout Nigeria over the previous 5 years. Their sturdy and optimistic unit economics, coupled with a deep buyer focus, will allow them to proceed to construct out an much more expansive community.”

In the meantime, as discussed last year, TeamApt’s pan-African enlargement play continues to be in movement, mentioned Eniolorunda; the corporate is concentrating on its first wave of worldwide enlargement inside the continent within the coming months.

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