PalmPay launches in Nigeria on $40M round led by Chinas Transsion

Africa focused payment startup PalmPay has launched in Nigeria after raising a $40 million seed-round led by Chinese mobile-phone maker Transsion.
The investment came via Transsions Tecno subsidiary, with participation from Chinas NetEase and Taiwanese wireless comms hardware firm Mediatek a Transsion spokesperson confirmed to TechCrunch.
PalmPay had piloted its mobile fintech offering in Nigeria since July, before going live today at a launch in Lagos.
The startup aims to become Africas largest financial services platform, according to a statement.
As part of the investment, PalmPay enters a strategic partnership with mobile brands Tecno, Infinix, and Itel that includes pre-installation of the startups app on 20 million phones in 2020.
The UK headquartered venture that was also founded with Chinese seed investment offers a package of mobile based financial services, including no fee payment options, bill pay, rewards programs, and discounted airtime.
PalmPay launches in Nigeria on $40M round led by Chinas Transsion
In Nigeria, PalmPay will offer 10% cashback on airtime purchases and bank transfer rates as low as 10 Naira ($.02).
In addition to Nigeria, PalmPay will use the $40 million seed funding to grow its financial services business in Ghana. The payments startup has plans to expand to additional countries in 2020, PalmPay CEO Greg Reeve told TechCrunch on a call.
PalmPay received its approval from the Nigerian Central Bank as a licensed mobile money operator in July. During its pilot phase, the payments venture registered 100,000 users and processed 1 million transactions, according to a company spokesperson.
With its payments focus, the startup enters Africas most promising digital sector, but also one that has become notably competitive and crowded particularly in the continents largest economy and most populous nation of Nigeria.
By a number of estimates, Africas 1.2 billion people representthe largest share of the worlds unbankedand underbanked population.
An improving smartphone and mobile-connectivity profile for Africa (see GSMA) turns this scenario into an opportunity for mobile-based financial products.
PalmPay launches in Nigeria on $40M round led by Chinas Transsion
Thats why hundreds of startups are descending on Africas fintech space, looking to offer scalable solutions for the continents financial needs. By stats offered WeeTracker, fintech now receives the bulk of VC capital and deal-flow to African startups.
Nigeria has multiple new digital-payments entrants see Chippercash and several firmly rooted later stage fintech players, such as Paga and recently confirmed unicorn Interswitch.
PalmPay CEO Greg Reeves believes the company can compete in Nigeria and across Africa based on several strategic advantages. A big one is the startups support from Transsion and partnership with Tecno.
PalmPay launches in Nigeria on $40M round led by Chinas Transsion
On channel and access, were going to be pre-installed on all Tecno phones. Youre gonna find us in the Tecno stores and outlets. So we get an immediate channel and leg up in any market we operate in, said Reeve.
Tecnos owner and PalmPays lead investor, Transsion, is the largest seller of smartphones in Africa and maintains a manufacturing facility in Ethiopia. The company raised nearly $400 million in a Shanghai IPO in September and plans to spend roughly $300 million of that on new R&D and manufacturing capabilities in Africa and globally.

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