In 2018, Carbon, a Nigerian financial technology company, publicly disclosed its financial results for the first time. This practice, while common for private companies based outside of Africa, is relatively unusual on the continent. Previous instances have been limited, such as when Rocket Internet was required to incorporate Jumia’s financials into its annual reports following its public offering, as the German investment firm was an early shareholder in the African unicorn.

Although Carbon has been commended for its commitment to transparency, it is yet to be determined whether other African startups will adopt a similar approach. Publishing audited financial statements could present challenges for private African companies, potentially leading to negative publicity or public relations issues if significant losses are reported, or to increased regulatory scrutiny if the company is performing strongly.

Carbon, a venture capital-backed company with $15.8 million in funding, was established in 2012 by Chijioke Dozie and Ngozi Dozie. Initially focused on the digital lending market, the company has since expanded its offerings to include a wide range of services, such as savings accounts, payment solutions, and investment opportunities.

In a 2019 interview with TechCrunch, CEO Chijioke Dozie explained that the decision to release the company’s financials was driven by the desire to attract talent and build trust with customers—a practice the company has continued on a bi-quarterly basis for the past two years. Dozie expressed his hope that this tradition will continue throughout the current year.

“Our annual report will be available in the second quarter following the completion of our financial audit. As you may remember, we published a year-in-review report in January 2020 prior to releasing our fiscal year 2019 report,” he stated to TechCrunch.

The company’s annual reports contain detailed information on gross revenue, profit and loss figures both before and after taxes, net impairment losses, total assets, liabilities, and equity. The year-in-review reports, conversely, focus on metrics such as payment volumes, customer numbers, loan disbursements, and investments made through the platform. 

As we await the release of its 2020 annual report, the company’s year-in-review provides an early indication of Carbon’s growth over the past year.

For the fiscal year 2020, the company, serving approximately 659,000 customers, reported processing ₦96.54 billion (~$241.35 million), an increase of 89% compared to the previous year. Loan disbursements totaled ₦25.21 billion (~$63 million), up 9.1% from FY2019. Furthermore, investments made on the platform reached ₦13.02 billion (~$32.55 million), representing a substantial 365% increase from the prior year.

The company attributes these results to several factors, including the launch of an iOS application which boosted customer acquisition, the introduction of a USSD banking feature designed for customers with limited access to traditional banking services, and the implementation of a social chat feature to facilitate quicker transactions. 

Similar to Carbon, other startups across the continent have begun to share year-over-year performance metrics. These companies are primarily active in the fintech and cryptocurrency exchange sectors. However, Carbon distinguishes itself by publishing both transaction data and comprehensive insights into its overall financial performance.

While transaction statistics often demonstrate significant year-over-year growth, a thorough examination of financial statements typically reveals a more nuanced picture. For example, Carbon generated $17.5 million in revenue for FY2019, a 68% increase from 2018. However, during the same period, the company experienced a 23% decrease in profit after taxes, a 222% increase in total liabilities, and a 107% increase in assets, ultimately concluding the year with a 6% increase in total equity.

It will be of interest to observe the figures for 2020. Beyond these numbers, Dozie indicated that the digital bank, which also operates in Kenya, is actively preparing to raise a Series B funding round to strengthen its position within the continent, in addition to its previous $10 million Series A from SA-based Net1 UEPS Technologies and a $5 million debt financing from Lendable in 2019.