• BURN MEDIA
    • Memeburn
      Tech-savvy insight and analysis
    • Gearburn
      Incisive reviews for the gadget obsessed
    • Motorburn
      Because cars are gadgets
    • Jobsburn
      Digital industry jobs for the anti 9 to 5!
Featured image: MFS Africa founder and CEO Dare Okoudjou (Supplied)

How MFS Africa made history for African fintechs with $4.5m Chinese-led deal

Johannesburg-based company MFS Africa made history earlier this month when it became one of the first African fintechs to secure funding from a Chinese-based venture capital (VC) firm.

This, after a China-based VC firm LUN Partners Group led a $4.5-million Series B funding round in which the VC invested $2.5-million in the digital payments company.

Dutch impact investor Goodwell Investments also participated in the round, investing $1.5-million, while the remaining amount of $500 000 was contributed by a number of angel investors including Mojit Davar, the former CEO of MoneyGram International.

MFS Africa CEO says as Chinese interest in African fintech grows, LUN Partners Group will likely invest in other fintech companies

MFS Africa founder and CEO Dare Okoudjou would not disclose to Ventureburn the equity stake that was offered up in return for the funding. However, he was able to state that MFS Africa management will still retain control of the company.

The 10-month long fundraising round concluded in December last year.

“The capital will be used to accelerate the monetisation of MFS Africa’s digital payments platform, build additional capabilities including a merchant service offering, and expand MFS Africa’s network globally, while ensuring it continues to exceed industry standards in terms of performance and compliance,” Okoudjou said in an email last week (26 April).

‘Help Chinese firms’

The investment will see MFS Africa, which Okoudjou founded in 2009, work with LUN Partners Group and its portfolio companies to boost financial inclusion in countries along China’s Belt and Road initiative.

As part of this initiative, China aims to cement its position as a major global power by disseminating Chinese services, investment, and infrastructure in countries in Asia, the Middle East, Europe and Africa.

“LUN Partners Capital believes that MFS Africa can help Chinese enterprises, especially fintech and ecommerce firms, drive financial inclusion and trade more easily in Africa by providing a single access point to scale and monetise digital services across the continent using mobile money networks,” he explained.

“Given the geopolitical and economic importance of the project to China, and the global ambitions of Chinese fintech firms, MFS Africa is strategically positioning itself as a conduit between the two regions,” he added.

Okoudjou also pointed out that as Chinese interest in African fintech grows, LUN Partners Group will likely invest in more fintech firms as the VC firm is “already exploring other opportunities on the continent”.

But just how did this funding round come about?

Strategic investor

Okoudjou said that after connecting numerous African mobile money networks to the company’s digital platform, MFS Africa was looking for investment to drive customer adoption and usage of its platform both domestically and internationally.

“This required strategic investors which understood the potential of MFS Africa and its model, the African market, financial inclusion, and had the ability to help accelerate growth through their existing portfolio and investor base,” Okoudjou said.

He said the company is also expanding its network beyond mobile networks with the addition of banks and other financial institutions, including outside the African continent, to help” unlock new capabilities”.

‘300% growth in last year’

Prior to this latest round of funding, MFS Africa had raised just under $10-million from angel investors and family offices in South Africa. Safika Holdings, one of MFS Africa’s biggest investors, also participated in an earlier funding round.

Okoudjou said MFS Africa — which currently has a consumer base of over 170 African consumers across 55 markets — has grown by over 300% in the last year.

This growth is despite different regulatory environments in which the company operates in across the countries that it has a footprint in.

“Regulation is currently the greatest challenge. From one country to the next, there can be vastly different views and approaches when it comes to what technologies are allowed to launch, which players can offer which channels, and which ecosystems can thrive,” he explained.

He said that MFS Africa is working closely with regulators around the world to ensure compliance with relevant regulations and to educate regulators on the “particularities of the mobile channel”. This he said will help regulators to better protect citizens and prevent misuse.

Said Okoudjou: “We hope to see greater emphasis on financial inclusion, and progressive approaches that encourage the adoption of accessible, affordable, transparent financial services via the mobile phone”.

Featured image: MFS Africa founder and CEO Dare Okoudjou (Supplied)

Author Bio

Daniel Mpala
Daniel's focus is on the African tech startup scene, Besides that, he is passionate about online security, privacy and international affairs. He studied International Relations and Media Studies at Wits and loves candy, racing ,fps games, and great music. More

WP Twitter Auto Publish Powered By : XYZScripts.com