There’s a new player in the Nigerian fintech and ecommerce market. Ugandan startup, Xente has announced its expansion into Africa’s most populated country, Nigeria.
We are proud to have a second home, Xente in NIGERIA 💃https://t.co/CMutygv18P pic.twitter.com/fWVpdDh9be
— Xente (@xentetech) March 22, 2019
Founded in 2013, Xente develops tools that enable consumers and African businesses to transact efficiently and safely with each other cashless and across all platforms. Xente is a multiplatform digital solution which develops ePayments, eCommerce, as well as financial services solutions.
The platform enables users buy recharge cards, pay utility bills and pay subscription among a few other things. Xente also supports a pay later feature that allows users make payments for the above services on credit. The pay later feature was recently unveiled in December 2018.
Over the last six years, Xente has grown gradually. According to Ms Lyn Tukei, Xente’s head of Public Relations, the platform now has over 20,000 users,
We are proud to have a second home, nothing makes us happy than to sit at Africa’s first growing economy. We are more than happy to provide every Nigerian citizen with a secure, convenient and stress-free online buying experience,” said Allan Rwakatungu –Xente’s CEO
The expansion to Nigeria was first announced in late January 2019. Back then the company disclosed that it was due to launch in the West African country in mid-February. However it missed the proposed date.
It’s expansion into Nigeria is the first on its bucket list. Xente plans to expand to several other countries by the end of April.
Can Xente Succeed In Nigeria?
Nevertheless, Xente’s expansion into Nigeria is a strangely interesting move. The last few years has seen a lot of scepticism about the growth of ecommerce and online business in Nigeria. Important online ventures from Konga, OLX, Zoto, Efritin and Careers24 are few companies that have either devalued or have completely pulled out of the Nigerian market.
Hello @AtimCharlotte, Xente is here to solve that problem and more. Make all Airtime purchases from the app, buy movie tickets, event tickets, bus tickets, make bill payments and more using your mobile money, bank card or even Pay Later on Xente. #BetterThanCash #CozYouAreSmart https://t.co/dZOgtsPlaz
— Xente (@xentetech) April 1, 2019
Importantly, many of these companies had deep pockets or strong financiers. For instance, OLX and Careers24 had the full backing of Naspers, Africa’s most valuable company. Konga on its part had raised over $200 million at its prime. Yet they all lost out as the Nigerian digital economy is still extremely challenging.
So if that’s the case, what are the chances of success for Xente?
Although not a traditional ecommerce player, Xente already has ample competition in the fintech sector. From Flutterwave, Paylater, Branch, PayStack, even QuickTeller, the competition is lit.
Importantly too, these companies have relatively deep pockets on their own. For instance, Flutterwave has raised over $20 million since it launched, and has processed billions of naira in payments. Paystack has raised over $10 million and Paylater recently scored a $5 million dollar loan.
Meanwhile, according to Crunchbase, Xente has only raised $100,000 in seed funding. Not a bad start, but it makes you wonder why expansion should be on the plate right now.
Final verdict, the Nigerian digital economy will be extremely harsh on Xente.
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