Fintech Startup Djamo Raises $14M for Francophone Africa Expansion

Djamo has secured USD 14 million from the renowned accelerator, three main investors (Enza Capital, Oikocredit and Partech Africa), as well as additional investors (Jango Capital, P1 Ventures, Axian and Launch Africa).

Djamo, founded by Régis Bamba and Hassan Bourgi last year, offers financial services to the underbanked and unbanked population, like the majority of fintechs across Africa.

Less than 25% of adults in French-speaking markets focused on these markets have bank accounts. This is partly due to the banks’ focus on wealthy customers and people they see as profitable for their businesses.

But when the region’s banks fell short, mobile money from telecoms filled the void. Over the past ten years, their wallets have touched more than 60% of the population, showing how many millions of French-speaking locals needed financial services.

Due to the reach and infrastructure of mobile money, firms like Djamo can now extend their current payment infrastructure to democratize financial access in the banking and mobile money sectors.

Since Djamo’s software enables interoperability between banks and mobile money, Ivory Coast users can transfer money back and forth from their bank accounts to their mobile money wallets, and the company has used this feature to offer a wide range of financial services.

The first product from Djamo is a debit card backed by Visa that enables customers to make online purchases from retailers such as Amazon, Alibaba or Netflix.

Other products come in the form of payroll software, peer-to-peer virtual accounts, and an auto-savings tool that helps users reach their financial goals. More related products available in Africa are Kuda, Telda, PiggyVest, TymeBank and Koa.

The various use cases are extremely valuable in the eyes of customers. According to Bamba, the company’s chief product officer, Djamo has accumulated so much that fintech still relies on word of mouth to scale across the Ivory Coast.

Over 500,000 users have registered on the platform at the time of writing, a more than 5-fold increase from the 90,000 users Djamo had in February 2021.

The addition of a free option and two premium options with different services—$2/month and $3.5/month—to the pricing structure has helped Djamo see revenue growth of 20% to 25% month over month.

According to them, these choices are 80% cheaper than other bank accounts provided by financial organizations, such as microfinance banks, which Djamo considers direct competitors because they use digital channels to deliver financial services in Côte d’Ivoire.

According to Bourgi, 60% of Djamo users have never used a Visa debit card before signing up for the service. The CEO is satisfied with the implementation and sees it as crucial to Djamo’s efforts to make financial services accessible to everyone, including those outside the Ivory Coast.

The business will use $14 million in funding, which it claims is the largest equity round for an Ivorian startup, to expand its product offering to include access to financing and investment before the end of next year and enter two more countries in Francophone Africa.

Techbuild’s Take

The existing credit system is simply not functional for millions of underbanked Africans since conventional banks have failed to develop a more individualized financial solution focused on underbanked and unbanked consumers.

Even in cases where conventional banks have knowledge of the client journey, they choose not to work with people who have an unstable credit history or poor credit score.

Fintech companies are using the growing use of mobile phones to bring financial inclusion to the unbanked and underbanked, especially in Africa. This has become popular because many people no longer need to visit banks to send and receive money.

This shows the necessity of innovation in financial services to upgrade the existing financial system and make it more inclusive.

Fintech startups currently provide services to unbanked people, collect data that will change how businesses serve these customers’ needs in the future and receive financial support from investors to expand into new regions, as in the case of Djamo.

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