Djamo is one in all a number of digital banking startups concentrating on Africa’s underbanked. However in contrast to many that target giant markets like Nigeria, Egypt, or South Africa, Djamo has carved out a distinct segment in Francophone West Africa, particularly Ivory Coast and extra just lately Senegal, the place it now serves over a million prospects.
The Y Combinator-backed fintech simply raised $17 million to develop its product suite for retail prospects and the hundreds of small companies it has onboarded within the final two years.
The fairness spherical, the most important ever for an Ivorian startup, surpasses Djamo’s $14 million Sequence A in 2022 and displays continued investor confidence in its mission to make banking accessible and reasonably priced.
Co-founder and CEO Hassan Bourgi declined to share the brand new valuation however stated it has doubled because the final increase.
Bourgi based Djamo with chief product and technical officer Régis Bamba in 2020 to shut the monetary entry hole in French-speaking African international locations, where few adults have financial institution accounts. Conventional banks within the area typically cater to the prosperous, leaving many of the inhabitants reliant on cell cash, a less expensive methodology that features utilizing cellphone numbers to make monetary transactions.
Cellular cash has been instrumental in increasing monetary entry throughout Africa. As of 2022, 28% of adults in Sub-Saharan Africa had a cell cash account, per the World Bank, and the area holds greater than half of the world’s whole. However that progress has additionally created a ceiling.
Most cell cash platforms provide primary companies: cash-in, cash-out, P2P transfers, and invoice funds. Whereas helpful, they don’t unlock extra superior monetary instruments like credit score, investments, or long-term financial savings.
Djamo is positioning itself between cell cash and conventional banking. The startup gives the accessibility of cell cash with the monetary depth of a checking account, an analogous playbook that Softbank-backed OPay and Transsion-owned PalmPay have used to scale to tens of hundreds of thousands of shoppers in Nigeria.
Its goal is a rising section of customers, principally youthful prospects, who’ve outgrown cell cash wallets however nonetheless discover conventional banks costly, outdated, or inaccessible, the founders say.
“These customers are evolving,” stated Bourgi. “However they don’t need to go the place their dad and mom went, into establishments with predatory pricing and aren’t tailored to the brand new era of shoppers. And that is what we’re constructing, attempting to turn out to be the go-to financial institution for this enormous cohort of shoppers that’s evolving now to extra complicated, wealth-building financing alternatives.”
Increasing product suite to swimsuit demand
Since our final protection, Djamo has expanded past playing cards and peer-to-peer transfers. The Ivorian fintech now gives financial savings vaults, funding merchandise — due to the area’s first fintech-issued brokerage license — and salary-linked financial institution accounts, which Bourgi sees as essential to boosting buyer engagement.
Like many neobanks, Djamo attracts banked customers who deal with it as a secondary account for smoother invoice funds and cell cash integration. However it’s the unbanked, harder to activate, who present better long-term potential. These customers, who make up over 55% of Djamo’s base, typically deal with the app as their major monetary service.
Bourgi says 9 in ten customers who depend on Djamo as their predominant account come from this section. To achieve extra of them, Djamo has adopted a hybrid method, combining its app with offline brokers who meet prospects in individual to facilitate transactions, just like the cell cash mannequin now extra broadly adopted by fintechs throughout the continent.
At present, solely 5–10% of Djamo customers obtain salaries by the app. “The subsequent section for us,” Bourgi stated, “is determining easy methods to transfer from 10% to 50% of our customers getting their salaries paid immediately into Djamo.”
In the meantime, Djamo can be ramping up companies for small companies—about 10,000 of them, a lot of whom began as retail customers. Based on CTO Bamba, the startup now offers bulk funds, fee hyperlinks, and QR code instruments to assist retailers settle for and handle funds immediately inside the app.
The fintech generates income from service provider charges on on-line card purchases and a premium tier plan, which 25% of customers pay for. Bamba provides that the corporate is exploring extra income streams, together with lending and incomes curiosity on buyer deposits. It’s within the technique of securing licenses that can enable it to supply interest-bearing financial savings accounts and credit score merchandise.
Djamo’s founders say the corporate has grown income 5x since 2022 and processed greater than $4.5 billion in transactions since launch.
With its latest growth into Senegal, Djamo has entered a market dominated by Wave, one in all Africa’s largest fintechs recognized for low-cost cell cash transfers. However moderately than compete immediately, Djamo positions itself as a complementary service, providing a digital banking expertise the place customers can retailer funds and entry extra superior instruments like financial savings, investments, and credit score.
Now a 250-person crew, Djamo is betting that its new spherical of funding, led by pan-African, gender-focused VC Janngo Capital, will assist it scale these companies throughout French-speaking Africa.
“We’re thrilled to steer the most important VC spherical in Ivory Coast and double down on Djamo, a mission-driven fintech reworking entry to monetary companies throughout Francophone West Africa,” stated Fatoumata Bâ, founder and government chair of Janngo Capital.
“In a area the place fewer than 25% of adults have entry to formal monetary companies, and the place ladies are twice as prone to be excluded, it is a important mission. With ladies making up a 3rd of its customers, Djamo isn’t solely closing the gender hole however unlocking financial alternative at scale.”
Different traders taking part within the spherical embrace SANAD Fund for MSMEs (managed by Finance in Movement), Partech, Oikocredit, Enza Capital, and Y Combinator.