Nigeria fintech startups and SA’s Paymenow receive support from Catalyst Fund

AFRICA – Two fintech startups from Nigeria and one from South Africa have been selected to receive capital and venture building support from Catalyst Fund, the global inclusive fintech accelerator.

Managed by BFA Global, supported by UK aid and JPMorgan Chase & Co, and backed financially by Rockefeller Philanthropy Advisors, Catalyst Fund is an accelerator for inclusive fintech startups and innovation ecosystems, in emerging markets.

To date, Catalyst Fund has accelerated 31 portfolio companies that have gone on to raise more than US$64 million in follow-on funding and reach over two million low-income customers. It has just announced its latest cohort of six fintech startups, which includes three from Africa.

They include two from Nigeria, namely WellaHealth, which offers affordable healthcare coverage to protect families from the financial shock that comes from unexpected health emergencies; and Flex Finance, a financial management tool that enables micro and small businesses to digitise operations and establish a digital footprint.

The South African recipient is Paymenow, a financial wellness app that allows low-income workers to access part of their earned wages before payday. The startup uses gamification to promote responsible financial behaviour and encourage saving, and aims to ease the burden inflicted by payday and micro lenders through affordable, real-time, access to cash.

It recently raised a ZAR4 million (US$230,000) seed funding round to help it scale both locally and across Africa and Latin America.

Managing director and co-founder Deon Nobrega said the round would bring about operational cash flow in the short-term, while Paymenow aims to reach operational break-even by the end of the fiscal year.

“Our business model and product, which entails a fully integrated business to business to consumer tech platform, has passed minimum viable product status and is ready to scale,” he said.

Paymenow co-founder and business development head, and former South African rugby international, Bryan Habana said Digital Ecosystems Group brings a strategic partnership from a business enablement perspective as well as access to funding and working capital.

“ViaMedia and the Digital Ecosystems Group will enable us to draw down on a wealth of product and operational expertise as well as access to a funding book that will allow our business model to scale locally as well as to the rest of Africa and Latin America,” he said.

Joint Digital Ecosystems and ViaMedia chief executive officer (CEO) Garth Mackintosh said Paymenow further enabled and accelerated his company’s mobile financial services strategy.

“We are excited to welcome Paymenow to ViaMedia, and more broadly, to our stable of ICT companies. We see fantastic growth prospects and complementary product offerings and clients across many of our group companies,” he said.

Also selected were two Mexican companies – digital insurance platform Mango Life and affordable financing provider Graviti – and Indian company KarmaLife, which enables gig and essential services workers to stabilise incomes and access savings and insurance.

Each company is receiving GBP80,000 (US$100,000) in grant capital, bespoke and expert-led venture building support for six months, and one-on-one connections with investors and corporate innovators that can help them scale.

“We believe we are facing a catalytic moment during which there is an opportunity to use technology to help low-income consumers and small businesses recover from the impact of COVID-19 and build greater financial resilience for the future,” said Catalyst Fund director Maelis Carraro.

“If we support the right companies now – from those finding new ways to provide affordable health and life insurance, to tools that can digitise micro and small businesses and provide new income opportunities, to those that can enable affordable access to essential services – these innovations can grow to play a critical role in improving financial health globally.”

Each startup in this cohort was sourced and approved by Catalyst Fund’s Investor Advisory Committee (IAC), comprising experienced fintech and emerging markets investors, including: Anthemis, Quona Capital, 500 Startups, Flourish Ventures, Accion Venture Lab and Gray Ghost Ventures.

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