The moves come a bit over a year after Paga raised a $10 million Series B round and Oviosu announced the company’s intent to expand globally, while speaking at Disrupt San Francisco.
Paga will leverage Apposit — which is U.S. incorporated but operates in Addis Ababa — to support that swelling into East Africa and Latin America.
Behind the acquisition is a story threaded with serendipity, return, and collaboration.
Both Paga and Apposit were founded by repatriate entrepreneurs. Oviosu did his MBA at Stanford University and wreaked at Cisco System before returning to Nigeria.
Apposit CEO Adam Abate gotta go back to Ethiopia 17 years ago for an duty in the country’s Ministry of Finance, after consideration of at Brown University and working in fintech in New York.
” I put together a team…to build…public business management systems for the country. And during the process…brought in my best friend Eric Chijioke…to be a technical operator ,” said Abate.
The two teamed up with Simon Solomon in 2007 to co-found Apposit, with a focus on building large-scale enterprise software for Africa.
A year later, Oviosu congregated Chijioke when he hurtled at his home while visiting Ethiopia for a bridal. It just so happened Chijioke’s brother was his roommate at Stanford.
That congregate began an extended discussion between the two on digital-finance innovation in Africa and eventually have all contributed to a Paga partnership with Apposit in 2010.
Apposit dedicated an engineering team to build Paga’s payment platform, Eric Chijioke became Paga’s CTO( while maintaining his Apposit role) and Apposit backed Paga.
” We aligned ourselves as African entrepreneurs…which then be transformed into a close relationship where we became…investors in Paga and strategically aligned ,” said Abate.
African seeds, global passions
Fast forward a decade, and the two companies have come fairly far. Apposit has grown its business into a team of 63 designers and technicians and has racked up a register of buyer partnerships. The firm facilitated digitize the Ethiopian Commodities Exchange and has contracted on IT and software solutionswith banks non-profits and brick and mortar companies.
For a decade, Apposit has also supported Paga’s pay product development.
Over that point, Oviosu and team went to work building Paga’s stage and driving digital remittance approval in Nigeria, residence to Africa’s largest economy and population of 200 million.
That’s been no small exercise considering Nigeria’s percentage of unbanked was pegged as high-pitched as at 70% in 2011 and still lurks around 60%, according to The Global Findex database.
Paga has created a multi-channel network to transfer money, pay-bills, and buy things digitally. The company has 14 million clients in Nigeria who can transfer stores from one of Paga’s 24,411 operators or through the startup’s portable apps.
Paga commodities work on iOS, Android , and basic USSD telephones utilizing a virtuoso, hashtag option. The fellowship has remittance partnerships with the likes of Western Union and allows for third-party incorporation of its app.
Since inception, the startup has processed 104 million transactions worth $6.6 billion, according to Oviosu.
With the acquisition, Paga assimilates Apposit’s tech capabilities and team of 63 technologists. The corporation will direct its improved the capacity and total workforce of 530 to support expansion.
Paga strategy its Mexico launch in 2020, according to Oviosu.
Adam Abate is now CEO of Paga Ethiopia, where Paga plans to go live as soon as it gains a local bank permission. The East African nation of 100 million, with the continent’s seventh largest economy, is bidding to become Africa’s next startup centre, though it still slows the continent’s tech standouts — like Nigeria and Kenya — in startup organisation, ISP the possibilities and VC.
Ethiopia has also been slow to adopt digital finance, with less than 1 % of the population using mobile-money, is comparable with 73% for Kenya, Africa’s mobile-payments leader.
Paga aims to shift the financial needle in “the two countries “.” The purpose is straight-forward. We crave Ethiopians to use the Paga wallet as their remittance detail. So it’s about digitizing cash deals and driving financial services ,” said Oviosu.
With the Apposit acquisition and country expansion, he too glances to grow Paga’s model in Africa and beyond, as an emerging marketplaces fintech solution.
” There are still several very large countries around the world in Africa, Latin America, Asia where these[ monetary inclusion] questions still exist. So our policy is not an African strategy…We want to go where these problems exist in a large way and build a global fees business ,” Oviosu said.
Fintech race in Nigeria
As it changes abroad, Paga faces increasing competition in Nigeria. For the last decade, South Africa and Kenya — with the success of Safaricom’s M-Pesa product — have been Africa’s standouts in digital payments.
But over the last several years, Nigeria has become a magnet for VC and fintech startups. This direction reached a high-point in 2019 when Chinese investors threw $220 million into Opera owned OPay and Transsion backed PalmPay — two fledgling startups with plans to scale in Nigeria and broader Africa.
That’s a sizable war chest compared to Paga’s total VC haul of $34 million, according to Crunchbase.
Oviosu reputation make marketplace adjust and benefits from the company’s expansion as factors that will keep it ahead of these well-funded new entrants.
” That’s where the world-class technology comes in ,” he said.
” We likewise take a perspective that we cannot build every use-case, ” he said — contrast Paga’s model to Opera in Africa, which has propelled variou startup verticals around its OPay product, from ride-hailing to food-delivery.
Oviosu compares Paga’s approaching to PayPal, which lets third-party developers to influence ventures around PayPal as the fee solution.
With its Apposit acquisition and a blueprint for continued stretch, PayPal may become more than a representation for Paga.
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