The Africa SMME Tech Report

Issue No. 16. Africa-Middle East local and small business tech news for 31 August 2021. This issue features Payflex, ZipCo, MarketForce, MaxAB, Ukheshe, OPay, and more...

Australia’s Zip Co Completes Acquisition of South African BNPL Payflex

Australian buy now, pay later platform Zip Co has acquired the remaining shares of South African BNPL startup Payflex. The Australian company acquired a 24.7% stake in Payflex back in April.

Payflex is led by CEO Paul Behrmann who launched the company in 2019. We reached out to Paul for a comment but have yet to receive a reply.

Here is what one of Zip Co’s advisers said on LinkedIn yesterday.

Zip Co has made other acquisitions in the Africa-Middle East BNPL space. Back in May, the company acquired Dubai-based BNPL Spotii for US$16 million. Spotti continues to compete in MENA under its own brand.

Elsewhere in the world, Zip Co owns Twisto in Europe and a 25% stake in Philippines BNPL TendoPay. And in the U.S., it owns QuadPay, which it has rebranded as Zip.

Zip Co had FY21 revenue of $403.2 million, up 150% year on year. Zip Co has 7.3 million active customers and 51,300 active merchants. Notably, Zip Co’s share price fell after the recent earnings announcement. Perhaps investors are expecting more in a space that is growing at such a feverish pace.

Zip Co sees its acquisition of Payflex as giving it a first-mover advantage in a region with a large, youthful population of mobile-payment users.

Given Zip Co now has a presence in MENA and South Africa, we wonder what further plans it has for the region?

We certainly expect to see more international BNPL companies enter the Africa and Middle East market.

Already we’ve seen Afterpay invest US$10 million in Dubai-based BNPL Postpay. Since making that investment, Afterpay was itself acquired by Square.

We also saw Checkout.com, an international payments platform, make a US$110 million investment in the Saudi BNPL Tamara. While that deal was not presented as an acquisition, our understanding is that Checkout.com acquired a controlling interest in Tamara.

We expect to see new African startups and existing fintech players make quick pivots into BNPL. We also expect to see each of the major African markets see new BNPL startups. And existing players like Kenya’s Lipa Later and Nigeria’s Buy Now Pay Later try to gain attention with new funding, new products, market expansion. Something.

One such pivot example appears to be M-Kopa. Babájídé Dúróshọlá, M-Kopa’ GM-Nigeria, suggested on Twitter that his company is working on a BNPL pivot. And he suggested that while it may begin with its core products, including phones and solar panels, it has wider ambitions.


This makes sense, given M-Kopa's mission is to finance key purchases for the underbanked.

Still, it’s not as easy as flipping a switch. BNPL requires capital and it entails risk. A platform that doesn’t use cutting-edge technology to manage its risk might get by in a growing economy. But it may risk collapse at the first sign of a downturn.

So the Zip Co news likely will add to a sense of urgency to enter or expand in Africa’s growing BNPL industry. Other international players will be hunting for acquisition targets.

There may have been no better motivator to act than yesterday’s news that U.S. BNPL Affirm saw its share price jump 40% on news that it had signed a deal with Amazon to offer BNPL to Amazon consumers spending US$50 and up. By the way, Zip Co has had a similar deal with Amazon Australia since 2019.


Thanks to Matchcraftfor sponsoring this issue of The Report. Matchcraft is a global martech company powering local search, social, and display campaigns. Matchcraft’s latest offering, “Powered By”, is an API solution giving third-party platforms access to the technology behind its flagship AdVantage platform.


Quick Takes — The Week in SMME Tech

MarketForce Tops Up with Another $100K

The Kenyan retail tech startup MarketForce has raised another US$100,000, adding to its recent US$2 million pre-Series A round investment. The new money comes from the Harambeans Prosperity Fund, which did not initially participate in the pre-Series A. Cumulatively, MarketForce has raised US$2.6 million since it was founded in Kenya in 2018 by CEO Tesh Mbaabu and CTO Mesongo Sibuti.

The company plans to use its recent funding to focus on building up its RejaReja marketplace and to take its concept to the Nigerian market, where it will face competition from the likes of Omnibiz and TradeDepot. Reja Reja allows informal shops to source, order, and pay for inventory at any time via interactive SMS and mobile app. RejaReja then delivers the goods within hours.

Egypt’s MaxAB Aquires Company, Secures Series A. The Egyptian B2B eCommerce platform MaxAB has secured a US$15 million Series A round, bringing its funding total to US$60 million since its founding. The company also acquired WaystoCap, a Moroccan B2B eCommerce and distribution platform. The acquisition will help MaxAB expand into the Maghreb region. MaxAB was founded in 2018 by Belal El-Megharbel, the former GM, Cairo, for Careem.

Ukheshe Expands in APAC. South Africa’s Ukheshe Technologies, a company that provides digital payments enabling technology to banks and fintechs, announced a partnership with dzcard, a Thailand-based smart card issuer. Ukhesehe’s partners include Visa, Mastercard, Ecobank, Nedbank, KCB, and others.


Found on LinkedIn

By now, we’ve all heard that SoftBank has entered the African market by participating in a $400 million funding round for OPay, the Chinese-backed, Nigerian-based mobile payments platform. The funding round brought OPay’s valuation to US$2 billion, making it one of Africa’s five tech unicorns.

We found this chart (courtesy of Max Cuvellier), which nicely illustrates how the new fintech unicorn valuations compare to those of Africa’s established mobile money players.


Coming Up on the BIG5D Podcast…

Episode 22: Deepankar Rustagi, Founder & CEO, Omnibiz (Nigeria)

Deepankar Rustagi is Founder and CEO of Omnibiz is a Nigerian B2B eCommerce player that provides a set of solutions for small merchants in the FMCG (fast-moving consumer goods) space. Armed with a fresh US$3 million seed round, the company is setting its sights on international expansion.

Episode 23: Tariq Sheikh, Founder & CEO, Postpay (UAE)

Buy now, pay later has been an intensely active space in recent months as a generational shift in how consumers pay for goods and services settles in and platforms race for dominance, regionally and globally. Tariq Sheikh is in the midst of this ongoing battle as Founder and CEO of Dubai-based BNPL Postpay.

In Case You Missed It…

Episode 21: Kennedy Kamau, Managing Director, Kune Food (Kenya)

Last week, Episode 21 of the BIG5D Podcast featured an interview with Kune Food Managing Director Kennedy Kamau. Kune Food is a Kenyan food tech startup’s model that sits at the intersection of cloud kitchens, delivery apps, virtual restaurants, home meal kits, and more.

Listen Now


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