FairMoney, Nigerian fintech, acquires PayForce for retail banking. – Global Village Space

FairMoney, a Nigerian credit-led digital banking platform, has acquired PayForce, a payment service provider serving small businesses. PayForce is a sub-brand of CrowdForce, which is backed by Y Combinator. The acquisition will enable FairMoney to expand its offer of financial services to merchants. Although terms of the deal were not disclosed, sources suggest it was a cash-and-stock deal worth between $15 million and $20 million. Oluwatomi Ayorinde, CEO of CrowdForce, will join FairMoney and lead the company’s payments business unit: PayForce by FairMoney.

FairMoney has primarily operated as a credit-led neobanking platform aimed at private customers, while CrowdForce, through PayForce, offers agency banking services. This is a branchless banking model that extends financial services to the last mile via a network of human ATMs. However, both businesses have evolved from their flagship products to a range of offerings due to competition-induced innovation and the raising of venture capital.

PayForce was launched by providing merchants with POS devices and allowing them to offer cash-in, cash-out, transfers and invoice payments to retail customers while injecting liquidity through a network of partners. Fintech serves over 10,000 businesses and has revamped its product suite to include business banking, finance team tools, B2B payments and virtual cards. It raised $3.6 million before its Series A last February.

FairMoney started with a digital lending product covering loans from 15 days to 24 months to mainly private customers. The company now offers debit accounts and cards, P2P transfers and payments to over one million retail and small business customers. The acquisition will provide incentives for PayForce acquired merchants who use FairMoney as their primary bank, such as 18% annual return on deposits.

FairMoney intends to add credit card, remittance, equity and investment products for its retail customers and include payroll services, BNPL and online merchant purchasing in its business-oriented product suite. The Tiger Global-backed fintech is in talks to raise a $30m+ ​​bridge round from new and existing investors, money that will go towards making these acquisitions (including PayForces) and scaling operations outside of Nigeria and across Africa.

Acquisitions have been on the rise in Africa recently, with domestic acquisitions growing by 31% in Q2 to 52% in Q3 2022. This signals an increasing consolidation trend fueled by falling prices and the venture capital crisis. Despite these tips, basic exit opportunities can trigger a sell in this current market condition as in the case of CrowdForce according to the former boss.