TeamApt Secures Funding to Expand Digital Banking for the Unbanked

TeamApt's Evolution: From Payment Switch to Digital Banking Powerhouse

Significant developments have occurred since our last coverage of Nigerian fintech startup TeamApt, approximately two years ago. At that time, the company had recently finalized a $5.5 million Series A funding round, secured from Quantum Capital Partners – a venture capital firm associated with Zenith Bank’s billionaire owner, Jim Ovia.

The Genesis of TeamApt

TeamApt possesses a compelling origin story. CEO Tosin Eniolorunda founded the company in 2015 following his departure from Interswitch. The company directly challenged the established billion-dollar firm when it obtained a license to function as a payment switch, delivering enterprise-level solutions to banks within Nigeria.

Initially, TeamApt operated on a bootstrapped model, generating revenue through project-based engagements. By 2017, the company was already providing services to 26 financial institutions and processing $160 million in monthly transactions, all without external investment.

Expanding into Consumer and Business Solutions

A year later, TeamApt initiated the release of products aimed directly at consumers and businesses, with the goal of promoting financial inclusion throughout the nation.

Moneytor was a digital banking service enabling financial institutions to monitor transactions via web and mobile interfaces. Monnify offered an enterprise software suite for small business management, while AptPay provided a centralized push payment infrastructure for banking mobile applications.

However, it was Moniepoint, an agency banking platform launched shortly after the Series A round, that achieved remarkable success due to its direct interaction with the public.

The Rise of Agency Banking in Nigeria

In nations with well-developed and extensive banking networks, the concept of agency banking is relatively unfamiliar. However, in developing markets like Nigeria, it is essential due to the limited bank-to-population ratio.

Reports indicate that Nigeria has only 4.3 bank branches per 100,000 people, significantly lower than the global average of 11.7 branches. Agency banking provides an alternative distribution channel for traditional retail banking, utilizing authorized agents to broaden the reach of branch networks.

For many Nigerians, agency banking represents a crucial access point to financial services, offering a viable option for meeting their financial needs.

Moniepoint's Dominance and Growth

Moniepoint agents utilize mobile applications and point-of-sale terminals to provide customers with access to services such as cash withdrawals, deposits, funds transfers, airtime purchases, and bill payments. The platform claims to facilitate 74% of all agency banking transactions in Nigeria.

Moniepoint processes approximately 68 million transactions, totaling over $3.5 billion monthly, through a network of 100,000 agents and 14 million customers. Including transactions from Monnify, TeamApt reports processing $17.5 billion in the last 12 months.

Expanding Beyond Agency Banking

Despite this success, TeamApt is now focused on integrating digital banking services into Moniepoint’s already dominant agency banking platform. The question arises: is the agency banking sector becoming overly saturated, hindering Moniepoint’s ability to gain further market share?

Eniolorunda responded, stating that there remains substantial growth potential within the agency space, with opportunities to expand market share as more agents and consumers embrace agency networks and point-of-sale systems.

A Mission to Serve the Underbanked

Most established digital banks in Nigeria primarily cater to individuals who already have bank accounts, often overlooking the unbanked or underbanked populations that traditional banks do not serve. Eniolorunda’s vision is to provide financial services to this underserved segment through the launch of a digital bank.

The company aims to position itself as a bridge between traditional banks and innovative digital approaches, serving the next billion Africans. TeamApt’s demonstrated traction in Nigeria, establishing the largest agency network in just two years, provides a strong foundation for this ambition.

Converting Offline Users and Future Potential

Given the transaction volume on Moniepoint and the fact that existing digital banks target the same customer base as traditional commercial banks, TeamApt has a significant opportunity to convert a portion of its offline users to online platforms. Success in this endeavor could inspire widespread adoption of this approach, greatly improving digital banking access for the unbanked.

Securing Series B Funding

To support this strategic expansion, TeamApt has secured an undisclosed Series B investment. Key investors include Novastar Ventures, managing a $200 million Pan-African fund, alongside Global Ventures, FMO, CDC Group, Endeavor Catalyst, Soma Capital, Kepple Africa, Oui Capital, and several local angel investors.

Future Plans and Strategic Integration

While continuing its existing switching business for enterprises, TeamApt intends to extend its offerings directly to customers and micro-SMEs through Moniepoint. Furthermore, subject to regulatory approval, both agency and digital banking platforms will operate under the Moniepoint brand.

Brian Waswani Odhiambo, Novastar Ventures’ Head of West Africa, highlighted the firm’s investment decision, citing the rapid growth of TeamApt’s agency network to become the leading operator in Nigeria. He expressed confidence that the company will replicate this success with its digital banking platform.

Looking Ahead: Series C and Pan-African Expansion

TeamApt has recently announced its intention to close another funding round, confirmed by Eniolorunda as a Series C. Concurrently, the company is developing expansion plans for other African countries with robust economies across all regions – Central, East, North, and South.

TeamApt is also exploring potential acquisitions to leverage technology and offline distribution networks, aiming to provide financial services to Africa’s mass market.