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Microtraction’s principal investment officer Dayo Koleowo made the announcement on the investment platform’s Medium profile yesterday (29 October).
Riby’s smart finance management platform provides co-operatives, company groups, associations and financial development institutions with tools that help them manage their members savings and contributions, lending and investments. The startup was founded in 2016 by CEO Salami Abolore (pictured above).
Riby was founded in 2016 by CEO Salami Abolore
Although Microtraction did not reveal the terms of the deal, the platform states on its website that it ordinarily invests $65 000 in two stages. The first investment is usually about $15 000 in exchange for a 7.5% equity stake which is followed by an additional $50 000 convertible note at a $1-million valuation cap in companies that show “significant progress” after Microtraction’s initial investment.
In the post, Koleowo explained that Microtraction’s move to invest in the fintech was informed by the size of the cooperative market and the startup’s solution, Abolore’s experience as well as the traction Riby has gained since its launch two years ago.
Koleowo explained that — based on data from Efina Access to Financial Services — 36% of savers in Nigeria use trade group savings collectors and cooperatives. He added that based on further research carried out with those in the banking sector, the “banked’ co-operative market represents about 10% of Nigeria’s banking industry which he said was worth $5.5-billion.
Riby has built an end-to-end core banking application that helps Cooperatives digitize their entire operations and financial activities.
Starting with Nigeria, Riby has the potential to brings 50m+ financially excluded/underserved people into the digital economy & finance system
— Yele Bademosi (@YeleBademosi) October 29, 2018
“We believe this will be about $10-billion across Sub-Saharan Africa alone,” said Koleowo.
He also outlined how Abolore — who has 12 year’s experience in business development, finance, tech and consulting — was an “outstanding operator” who had shown high abilities in his different roles prior to founding the fintech startup.
Koleowo said the number of Riby’s paid users had grown by 100% in the last four months “due to increased activities from partners”.
“They had over 20 000 groups registered with 10% onboard, and others on a ‘wait list’. There were also six corporate partners at different engagement stages with cumulative expected customer size of 2.5-million new users expected in about a year,” he explained.
Glad to have the @microtraction team working closely with us @Ribyfinance as well to create a new way of Saving & Banking, modernizing the old. Wealth Creation and Wealth Management through groups. You are in good company with our partners like @UNIONBANK_NG & @bankofindustry https://t.co/O3wZ65RWdo
— Abolore Salami (@aboloresalami) October 29, 2018
Earlier this year Riby was one selected as one of 12 startups for the first Google Launchpad Accelerator Africa class. The startup was also part of 12 African startups selected by venture capital firm Village Capital for its Village Capital Fintech Africa 2018 programme.
Read more: Nigeria’s Microtraction announces its sixth deal, with cloud accounting startup
Read more: Names of 12 startups announced for Village Capital Fintech Africa 2018
Read more: Google’s Launchpad Accelerator Africa announces first cohort of 12 startups
Featured image: Riby CEO and founder Salami Abolore (Penzaarville Africa via Twitter)