Djamo is one of several digital banking startups targeting African banks. However, unlike many people who focus on large markets such as Nigeria, Egypt and South Africa, Djamo carves out a niche in French-speaking West Africa, particularly in ivory coasts and, more recently, Senegal. Currently, it serves more than 1 million customers in both countries.
Supported by Y Combinator, FinTech has raised $17 million to expand its product suite for these retail customers and the thousands of small businesses they have onboarded over the past two years.
The biggest equity round of Ibolia startups ever surpassed Djamo’s $14 million Series A in 2022, reflecting on the ongoing trust of investors in their mission to make banks affordable.
Co-founder and CEO Hassan Bourgi refused to share the new rating, but said it has doubled since its last pay raise.
Bourgi founded Djamo in 2020 with Chief Products and Technology Director Regis Bamba to fill the financial access gap in French-speaking African countries. Traditional banks in the region often cater to the wealthy, leaving most of the population dependent on mobile money. This is an inexpensive method that involves conducting financial transactions using a phone number.
Mobile money has helped to expand financial access across Africa. As of 2022, 28% of adults in sub-Saharan Africa have mobile money accounts following the World Bank, and the region holds more than half of the world’s total. But that progress also created ceilings.
Most mobile money platforms offer basic services such as cash-in, cash-out, P2P transfers, and bill payments. It’s convenient, but doesn’t unlock more advanced financial tools like credit, investment, and long-term savings.
Djamo stands between mobile money and traditional banking. The startup offers mobile money accessibility with bank account financial depth, a similar playbook used by Palm Pay, owned by Opey and Transsion, supported by SoftBank, which has been used to scale tens of millions of customers from tens of millions of customers in Nigeria.
Its target is a segment of growing users of users who have acquired a grown mobile money wallet, but who think traditional banks are expensive, outdated or inaccessible, and traditional banks still believe they have banks.
“These users are evolving,” Bourgie said. “But they don’t want to go where their parents went, they go to predatory pricing institutions, they don’t adapt to a new generation of customers, and they’re trying to become the go-to bank for this huge client that is what we’re building and is now evolving into fundraising opportunities that build more complex wealth.”
Expand product suites to meet demand
Since the last reporting, Djamo has expanded beyond card and peer-to-peer transfers. Ivorian Fintech offers payroll vaults, investment products and payroll bank accounts that Bourgi sees as important to boost customer engagement, thanks to its savings safe, first fintech issued brokerage license in the region.
Like many neobanks, DJAMO attracts users of banks who treat them as secondary accounts for smoother invoice payments and mobile money integration. But it is the more difficult revitalization without banks that demonstrates greater long-term potential. These users, which make up over 55% of Djamo’s bases, often treat the app as a major financial service.
According to Bourgi, nine out of the 10 users who rely on Djamo say that because their main accounts come from this segment. To reach many of them, Djamo has adopted a hybrid approach, combining its app with offline agents, meeting with customers in person to promote transactions, similar to the mobile money model currently widely adopted by Fintechs across the continent.
Currently, only 5-10% of DJAMO users receive their salary through the app. “It’s the next step for us,” Bourgie said. “We’re paying our salaries directly to Djamo, thinking about how to move from 10% to 50% of our users.”
Meanwhile, Djamo is also strengthening its services for small and medium-sized businesses. Of these, 10,000 people, many of whom have started as retail users. According to CTO Bamba, the startup is currently offering bulk payments, payment links and QR code tools to help merchants accept and manage payments directly within the app.
FinTech generates revenue from merchant fees and premium tier plans for online card purchases. This is what 25% of users pay. Bamba adds that the company is investigating additional revenue streams, including customer deposit lending and profits. It is in the process of protecting your licenses that allow you to offer savings accounts and credit products with interest.
The founder of Djamo says the company has increased revenue five times since 2022 and has processed more than $4.5 billion in transactions since its launch.
With the recent expansion to Senegal, Djamo has entered a market dominated by Wave, one of Africa’s largest fintechs known for its low-cost mobile transfers. But rather than directly compete, Djamo positions itself as a complementary service, offering a digital banking experience that allows users to store their funds and access more sophisticated tools like saving, investment, and credit.
Djamo, a team of 250 now, bets that new funding led by Pan-African, led by gender-focused VC Janngo Capital, will help expand those services across French-speaking Africa.
FatoumataBâ, founder and executive chair of Janngo Capital, said:
“This is an important mission in areas where under 25% of adults have access to formal financial services, where women are likely to be twice as excluded.
Other investors participating in the round include MSMES’ Sanad Fund (managed by Finance in Motion), Parttech, Oikocredit, Enza Capital and Y Combinator.
Source link
