Nigerian fintech startup, Appzone raises $10M to expand to other African countries and develop its proprietary technology

Lagos-based fintech software startup, Appzone has announced the raise of $10 million in Series A investment largely dominated by local investors. The round was led by Lagos-based investment firm CardinalStone Capital Advisers and other investors based in the country such as V8 Capital, Constant Capital, and Itanna Capital Ventures. The round also saw New York-based but Africa-focused firm Lateral Investment Partners participating.

With this new funding, the startup plans to expand its workforce, scale its product and services, expand and consolidate its presence in other African countries. Other countries where the firm has a presence include the Democratic Republic of Congo, Ghana, Gambia, Guinea, Tanzania, and Senegal.

Founded in 2008 by the trio of Emeka Emetarom, Obi Emetarom, and Wale Onawunmi, Appzone started as a custom software development provider for commercial banks in Nigeria. In 2011, the company launched its first core banking product targeting microfinance institutions. The following year, it launched its first product (branchless banking) for commercial banks. In 2016, it went live with its mobile and internet banking service and launched an instant card issuance product in 2017. In 2020, the company launched services catered to end-to-end automation of lending operations for banks and blockchain switching.

The Appzone platform is currently used by 18 commercial banks and over 450 microfinance banks in Africa. Together, they amass a yearly transaction value and yearly disbursement of $2 billion and $300million.

So far, the company has been focused on providing core banking service software that runs financial institutions’ entire operations and interbank processing. This is done by integrating these institutions into a decentralized network powered by blockchain. Alongside this new investment, the company is also introducing and scaling another fintech product that will focus on end-user applications.

This is not the first time the startup will be raising an equity round. In 2014, the startup closed a $2million funding deal from South African Business Connexion (BCX) 2014. Four years later, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. Overall, the company says it has raised $15 million in equity funding.

Commenting on the investment, Yomi Jemibewon, the co-founder and managing director of Cardinal Stone Capital Advisors, described the firm’s investment in Appzone as further proof of Africa’s potential as the future hub of world-class technology.

“Appzone is building a disruptive fintech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure, and software as a service. The impact of Appzone’s work is multifold — the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best in class employment opportunities”

Many African financial institutions usually rely on foreign tech solutions to solve their problems. However, issues like pricing, flexibility to innovate, and lack of technical support always arise. This is where Appzone has created a niche for itself as a reliable software service provider for these institutions. This new funding will help it consolidate its impressive growth and expand its services to more African countries. One remarkable thing about this investment is the dominance of local investors in the round. Hopefully, there will be more involvement of investment firms and local VCs in upcoming deals.