YC-backed Ivorian fintech startup, Djamo raises $17m to bank the unbanked

Ivorian-based startup Djamo has raised $17 million in seed funding in an equity round led by pan-African and gender-focused VC Janngo Capital to expand its product suite for its retail customers and target 10,000 small businesses.

The funding round by the Y Combinator-backed fintech is the largest ever for an Ivorian startup. It also surpassed Djamo’s $14 million Series A in 2022, which reflects the continued investor confidence in the fintech’s mission to make banking accessible and affordable.

Djamo’s Co-founder and CEO, Hassan Bourgi, expressed that its new funding round will help it scale more services across French-speaking Africa. The Ivorian fintech is positioning itself between mobile money and traditional banking as it offers the accessibility of mobile money with the financial depth of a bank account, a similar playbook that Softbank-backed OPay and Transsion-owned PalmPay have used to scale to tens of millions of customers in Nigeria.  

The startup target is a growing segment of users who are young customers outgrowing mobile money wallets but still find traditional banks expensive, outdated, or inaccessible.

“These users are evolving. But they don’t want to go where their parents went, into institutions with predatory pricing and that aren’t adapted to the new generation of customers. And this is what we are building, trying to become the go-to bank for this huge cohort of customers that is evolving now to more complex, wealth-building financing opportunities,” said Bourgi. 

Reacting to the fund, founder and executive chair of Janngo Capital, Fatoumata Bâ, said it is delighted to lead the largest VC round in Ivory Coast and double down on Djamo. The group described the startup as a mission-driven fintech transforming access to financial services across Francophone West Africa.

“In a region where fewer than 25 per cent of adults have access to formal financial services, and where women are twice as likely to be excluded, this is a vital mission. With women making up a third of its users, Djamo is not only closing the gender gap but unlocking economic opportunity at scale,” said Fatoumata

Other investors participating in the round include SANAD Fund for MSMEs (managed by Finance in Motion), Partech, Oikocredit, Enza Capital, and Y Combinator.

See Also: Funding: African startups raised $50 million in March, lowest since 2020

About Djamo

Founded in 2020 by Bourgi with Chief Product and Technical Officer (CTO) Régis Bamba, Djamo aimed to close the financial access gap in French-speaking African countries, where only a few adults have bank accounts. 

While traditional banks across the region struggle to cater to the abundant population, others have relied on mobile money, a cheaper method that includes using phone numbers to make financial transactions. According to the World Bank, 28 per cent of adults in Sub-Saharan Africa had a mobile money account in 2022, where the region holds more than half of the world’s total. 

Mobile money has been significant in expanding financial access across Africa as most platforms offer basic services such as cash-in, cash-out, P2P transfers, and bill payments. While useful, they don’t unlock more advanced financial tools like credit, investments, or long-term savings.

Since its last funding round in 2022, Djamo has been one of several digital banking startups seeking to fill the gap of Africa’s underbanked. Compared to other fintechs that focus on large markets like Nigeria, Egypt, or South Africa, Djamo has centered its service to Francophone West Africa, restricting to Ivory Coast. Its recent expansion to Senegal sums its customers to over one million customers across both countries.

Though the current valuation was concealed, Bourgi hinted that it has doubled since the last raise.

Djamo has now expanded beyond cards and peer-to-peer transfers as the Ivorian startup now offers savings vaults, investment products, and salary-linked bank accounts, which it sees as important to boosting customer engagement.

Djamo attracts banked users who treat it as a secondary account for smoother bill payments and mobile money integration like many neobanks. Its strength lies in the unbanked, who make up over 55 per cent of Djamo’s base, who treat the app as their primary financial service and show greater long-term potential. Currently, only 5 to 10 per cent of Djamo users receive salaries through the app.

Bourgi noted that nine in ten users who rely on Djamo as their main account come from the unbanked segment. To reach more of these groups, the fintech introduced a hybrid approach that combined its app with offline agents who meet customers in person to facilitate transactions. The system is similar to the mobile money model which is mostly adopted by fintechs across the continent.

“The next phase for us is figuring out how to move from 10% to 50% of our users getting their salaries paid directly into Djamo,” Bourgi said.

Future expansion

Following its $17 million seed funding, the Ivorian startup is gearing up services for about 10,000 small businesses that started as retail users.

According to CTO Bamba, the startup now provides bulk payments, payment links, and QR code tools to help merchants accept and manage payments directly within the app. 

Bamba explained that the company is exploring additional revenue streams which include lending and earning interest on customer deposits. Also, it is in the process of securing licenses that allow the startup to offer interest-bearing savings accounts and credit products.

Djamo’s founders say the company has grown revenue 5x since 2022 and processed more than $4.5 billion in transactions since launch. The fintech generates revenue from merchant fees on online card purchases and a premium tier plan, which 25 per cent of users pay for. 

Within its recent expansion to Senegal, Djamo has entered a market dominated by Wave, one of Africa’s largest fintechs known for low-cost mobile money transfers. Rather than face direct competition, Djamo is focusing on complementary services by offering a digital banking experience where users can store funds and access more advanced tools like savings, investments, and credit.