South Africa’s Revio raises $5.2m seed funding to streamline payments in Africa

Revio, a startup based in South Africa, has raised $5.2M in seed funding in order to address the fragmented payment landscape in Africa. This latest seed funding has the commitment of QED and Partech among the few companies working on payment solutions to combat the problem of dissolution in this field.

Ruaan Botha, the co-founder and CEO, started this fintech venture after realizing the significant time and manual effort that businesses invest in collecting payments from different providers and managing customer interactions related to outstanding and unsuccessful payments.

According to Botha, digital payments are experiencing rapid growth in Africa, with a projected value of $146 billion in 2023. This is not even accounting for nearly $500 billion in mobile money transactions. However, he points out that the African payment landscape presents unique challenges and opportunities. The most prominent challenge is the extensive fragmentation of the payments ecosystem, characterized by over 280 licensed payment service providers, 42 different currencies, and diverse consumer payment habits.

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Revio’s payment solution streamlines transactions in Africa

Revio, similar to counterparts like Primer, Spreedly, and Zooz in the U.S. and Europe, offers a comprehensive order-to-cash lifecycle solution through its API. This platform enables merchants to connect with over 70 payment methods and service providers, enhancing transaction routing, automated failover, retries, and real-time customer engagement workflows to boost payment success rates.

What sets this platform apart is its focus on addressing payment failures in Africa, not just due to technical issues but also factors like insufficient funds or abandoned authorizations. Revio takes real-time actions through channels like email, SMS, WhatsApp, and push notifications to re-engage consumers during the checkout process, offering more convenient payment options such as cash or flexible payment plans.

The platform has expanded its coverage to over 25 African markets, ensuring broad accessibility for businesses transacting across diverse regions.

Additionally, its growth and coverage have been primarily driven by its enterprise and mid-market customers, despite having approximately 50 customers in total. The company initially catered to large-scale enterprises, mid-market corporates, and fast-growing scale-ups involved in recurring revenue businesses with high transactional volumes. However, Revio has refined its focus to concentrate more on large-scale enterprises with intricate payment needs.

Rather than pursuing a high volume of clients, the company now targets high-value clients with complex payment requirements, particularly those operating in multiple African markets. These clients often face unique challenges related to payment tokenization and addressing high failure rates. Notable clients in this category include some of Africa’s largest insurers and telcos such as Old Mutual, MTN’s aYo, Innovation Group, and Standard Bank.

Revio, which says it experienced an impressive 1,000% revenue increase in the past year, is also planning to expand its reach to global retailers serving the African market in its upcoming development phase. The startup is engaging with these merchants to better understand their needs, especially regarding cross-border reconciliation settlement. The recently acquired capital will be used to enhance the company’s technological capabilities in this area and expand its team by hiring talent both within and outside the African continent.

Gbenga Ajayi, a partner and Africa lead at QED Investors, expressed confidence in Revio’s mission to address the unresolved challenges in payments within Africa. He emphasized that Revio’s platform has the potential to stimulate e-commerce and digital payment growth on the continent while enabling global and local merchants to tap into new customer segments. Ajayi also commended the platform’s exceptional team for their ability to execute effectively, even in challenging market conditions, and their strong localization efforts that have led to success in acquiring enterprise customers.

From pre-seed success to seed round support by QED and Partech

This marks the second round of funding that Revio has secured within the past year. In November, the company successfully obtained $1.1 million in pre-seed funding from investors, including Speedinvest, Ralicap, and Everywhere VC. These same investors continued their support by participating in the seed round led by QED and were joined by the growth-stage pan-African VC firm, Partech.

The fact that QED and Partech, known for their focus on growth-stage investments, decided to participate in Revio’s seed round is a clear testament to the value and relevance of Revio’s product. It is worth noting that Partech Africa typically invests in Series A and B deals, and this marks QED’s first investment at the seed stage in an African startup, following Moniepoint’s pre-Series C and Remedial Health’s Series A investments.

The co-founder and chief operating officer of Revio, Nicole Dunn, in a statement with TechCrunch, noted;

”I think it’s a great signal for the ecosystem, not only for us but hopefully to the rest of the ecosystem. This should also encourage some of those investors that had committed to investing in Africa and started deploying before the downturn to follow the example that QED set by coming early into a seed round, even in this current market, especially in an African context.”

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