QED makes first African investment, backing Nigerian fintech TeamApt in $50M+ deal TechCrunch

QED Investors, a US fintech-focused venture capital firm, has led a new investment in TeamApt, a Nigerian fintech offering business payments and banking platforms. The investment was over $50 million, according to sources familiar with the matter, although neither QED nor TeamApt would confirm the figure.

Existing investors from the company’s Series B last year (Crunchbase pegs it at $30M+) – Lightrock, BII and Novastar Ventures – all participated in this round.

Although TeamApt would not print any “letter” for this latest round, it could perhaps be described as a pre-Series C round because sours says the company is still in the market to raise a Series C round next year.

“We always approach our fundraising efforts opportunistically and want to ensure that the market context, the cash needs of the business and the investor profile align with our strategic growth views,” said the company’s Tosin Eniolorunda when asked if the current market downturn affected the company’s Series C fundraising. originally planned effort for this year. “Given the overall cautious market environment, we were not in active fundraising mode. As a profitable company, we did not need the money, but we were pleased to take the opportunity to add a new high-profile investor.”

Last piece in the puzzle

With nearly $5 billion under management (AUM) and a recently closed seventh fund of $1.05 billion, QED has backed over 180 companies (of which 27 are unicorns). In a move rarely made by Western VCs, QED announced the hiring of Gbenga Ajayi and Chidinma “Chid” Iwueke to lead its investments in Africa in January. Nigel Morristhe firm’s co-founder and managing partner, in the same January interview with TechCrunch, said Africa was the final piece of the puzzle to transform QED into a global fintech specialist VC firm.

TeamApt operates one of Nigeria’s largest business payment and banking platforms, processing a transaction value of $100 billion annually through its Moniepoint and Monnify products. Moniepoint now serves 400,000 SMEs across Nigeria, giving them access to various functions to manage their operations: working capital, business expansion loans and business management tools such as expense management (business payment cards), accounting and bookkeeping solutions and insurance.

In TeamApt, QED finds a company that started four years before raising a venture round in 2019, but has grown 300% annually to build one of the largest fintechs in Africa (in revenue and market capitalization) – and is profitable. The company generated more than $100 million in annual revenue last year and saw its valuation jump nearly fourfold from its previous valuation round, according to sources.

“From our startup days, we’ve built products where we can see positive unit economics from day one, which has continued to be reflected in our profitability,” the CEO said in an emailed response to TechCrunch. “This has placed us in the realm of the few attractive cash-flow-positive hyper-growth companies – even as we continue to grow at triple digits year-over-year while expanding our margins.”

Eniolorunda said this new round of funding would help TeamApt expand its credit offerings. The company’s lending portfolio remains small as it continues to lend from the balance sheet of the microfinance bank subsidiary. But as the portfolio expands, the company plans to tap into more lending partnerships, including banks, development finance institutions and securitization structures, to access debt facilities.

QED is also a recognized credit operator and has helped develop strong credit functions for portfolio companies such as Brazil’s Nubank and India’s Jupiter, which, according to Eniolorunda, fits TeamApt’s leading investor profile. In a January interview, QED said it expects future portfolio companies to “leverage their specialization in fintech, operational expertise and willingness to roll up their sleeves” to build and scale financial products for Africa’s needs, which is precisely at the heart of TeamApts business.

Nigeria is leading the way in wide-scale use of digital payments across Africa, with over $800 billion in digital transactions annually for the first four months of this year. It’s a huge fintech market, with countless companies offering a variety of services across the country, such as Flutterwave, Chipper Cash and OPay, achieving unicorn status. TeamApt, in subsequent rounds, could give QED the opportunity to stamp another unicorn.

“I’m proud to bring Africa to QED and QED to Africa. I couldn’t think of a better way to enter the continent than with our investment in TeamApt,” said Gbenga Ajayi, QED Investors partner and head of Africa, in a statement. “Tosin and his team have steadily built an impressive payment and distribution network across Nigeria over the past five years. Their strong and positive unit economics, combined with a deep customer focus, will enable them to continue building out an even more expansive network.”

Meanwhile, as discussed last year, TeamApt’s pan-African expansion play is still in motion, Eniolorunda said; the company is targeting its first wave of international expansion in the coming months.