Ivorian fintech Julaya gets $5M to become banking partner for businesses in Francophone Africa • TechCrunch

Ivorian payments-led fintech startup Julaya has raised its pre-Series A round with $5 million. The company, which facilitates B2B payments for businesses in French-speaking West Africa, mainly via mobile money channels, has raised $7 million in the funding round.

In 2019, West Africa reported the most live mobile money services of any region, with 56 million active accounts. In Côte d’Ivoire, one of Francophone Africa’s largest mobile money markets, 75% of the population own a mobile money account, compared to 20% who have bank accounts. That is why Julaya launched its services in the West African country and has since expanded to Senegal, where mobile market penetration is around 80%, as well as other countries in the UEMOA region (West African Economic and Monetary Union), which also have widespread mobile money use .

Small to large businesses in these countries can use the Julaya platform to make bulk payments to other businesses and their unbanked employees via existing mobile money channels. But they can now access more services, such as the startup’s prepaid card — issued by Mastercard — for business expense management. The cards are tailored for companies’ travel needs, other online expenses and easy import of transactions into their accounting system, CEO. Mathias Leopoldie told TechCrunch in an interview.

“Our meaning or strategy with the cards is to offer a complete range of services. Because if you only have cards, I don’t think you can build a big startup with a lot of traction that you want, for example in the US, said the CEO, who founded the company with Charles Talbot. “The card payment industry, apart from South Africa, maybe Nigeria and a bit in Egypt, is evolving and while you might be able to grow a business on it, it’s almost impossible in our region [Francophone Africa].”

Léopoldie stated that offering cards – most of which are physical (at the request of customers) – is not the main strategy for Julaya in terms of revenue growth. It is a switching cost strategy that, according to him, differentiates fintech from competitors such as YC-backed, which see cards as the main driver.

More than 40% of Julaya’s 500 small and medium enterprises (SMEs), startups, large enterprises and public institutions use the enterprise expense management function. While the most important volumes come from medium to large enterprises, fintech has surprisingly seen greater adoption from its traditional and non-digitalized small customers, noted Léopoldie.

Over the past year, the Ivorian-French startup has also expanded its product range to include a “Cash & Collect” solution that allows “quick and secure” cash collection, particularly in the FMCG sector. Here, businesses can deposit cash from physical sales and field sales into their Julaya account via a mobile money agent branch without going to a bank.

Last July, Léopoldie said the fintech was processing more than $1.5 million monthly. Those numbers have quintupled to more than $7.5 million, with the same revenue growth of over 500% year over year. Brands such as Jumia and Sendy are some of Julaya’s clients.

Image credit: July

European venture capital fund Speedinvest led Julaya’s pre-Series A expansion round. EQ2 Ventures, Kibo Ventures, angel syndicates Unpopular Ventures and Jedar Capital, existing investors Orange Ventures, Saviu, 50 Partners and Ivorian business angel Mohamed Diabi and professional footballer Édouard Mendy also invested in the round.

Mendy’s participation – his first in Africa and second globally – shines a spotlight on the growing involvement of athletes in Africa’s venture capital scene. This week, TechCrunch featured Byld Ventures, a $15 million fund targeting African fintechs. A striking observation from the news was the number of athletes involved as the firm’s limited partners; some have also made direct investments from various reports. Mendy is African, unlike the others who are mainly European. While he may be one of the first African athletes to back startups, Léopoldie assumes there will be more examples in the foreseeable future.

“I think he’s a little ahead of the curve. We see that football stars, or valuable individuals in the sports industry, are beginning to see that they need to invest in venture capital for two reasons. The first is that although it is a risky asset, it offers great returns. And secondly, they must use their image to show that they not only care about their sports career, but want to be an inspiration for their home country. It was meaningful for Édouard Mendy because he is Senegalese.”

Julaya also received investments from the CFO and Country Manager in Senegal. Proceeds from this funding round will help the fintech with further expansion plans across French-speaking West Africa as it plans to open offices in Benin, Togo and Burkina Faso, hire talent and ramp up product development, including the launch of a credit product targeting 200,000 SMEs in the UEMOA region .

Enrique Martinez-Hausmann, principal at lead investor Speedinvest, said the firm’s portfolio company is changing how businesses operate in a complex cross-francophone payments landscape, which also has well-known players such as CinetPay and Bizao. “Looking ahead, the potential of Julaya’s technology goes far beyond payment capabilities, and has the opportunity to become a close banking partner for companies in West Africa,” said Martinez-Hausmann.