Djamo: Pioneering a Financial Super App in Francophone Africa

Djamo, a consumer-focused financial super app operating in Francophone Africa, has distinguished itself as the inaugural startup originating from Ivory Coast to receive investment from Y Combinator.

Addressing an Underserved Market

Despite the recent surge in financial services across Africa, Djamo concentrates on resolving a specific, largely neglected issue within Francophone Africa.

Currently, fewer than 25% of adults in the region possess bank accounts, with traditional banks primarily catering to the wealthiest 10-20% of the population. The remaining substantial market segment – approximately 120 million individuals – is often deemed unprofitable by these institutions.

However, the decline in traditional banking services created an opening for mobile money solutions offered by regional telecommunications companies. Over the past decade, mobile wallets have reached over 60% of the population, demonstrating a significant demand for financial services among French-speaking communities.

This widespread mobile money infrastructure now enables startups like Djamo to build upon existing payment systems and broaden access through innovative applications.

The Founding of Djamo

In 2019, Hassan Bourgi, an experienced entrepreneur, returned to Ivory Coast after successfully exiting his Latin American startup, Busportal, which was acquired by Naspers-owned redBus.

There, he connected with Régis Bamba, who at the time was leading several mobile money projects at MTN, one of Africa’s leading telecommunications providers.

Driven by their own frustrating experiences with banking and observing similar issues among millennials, Bourgi and Bamba launched Djamo last year with the aim of disrupting the conventional banking landscape.

A Mobile-First Approach

“Accessing banking services here can be incredibly challenging, and we recognized a significant opportunity,” stated Djamo CEO Bourgi in an interview with TechCrunch. “From the outset, our goal was to create a mobile-first platform accessible to a broad audience, and our combined experience in developing mass-market consumer products proved invaluable in launching Djamo.”

Bourgi notes that millennials in the country are actively seeking engagement with technology companies and expect a different level of service. Consequently, Djamo prioritizes a superior user experience and responsive customer support.

Tailored Financial Solutions

Rather than adopting a standardized approach, Djamo focuses on providing layered solutions to meet diverse user requirements.

This includes enabling Ivorians to conveniently pay for online services such as Amazon, Alibaba, and Netflix, as well as offering timely access to Visa debit cards. These customized offerings have fueled Djamo’s organic growth through positive word-of-mouth referrals.

Previously, obtaining a bank card required lengthy queues and visits to physical branches. Djamo streamlines this process and even allows customers to utilize their cards with no fees for a wide array of services.

“We are committed to offering a zero-fee card with no recurring charges up to a certain limit. Beyond that, transaction fees apply. A premium plan, priced at approximately $4 per month, provides users with higher transaction limits,” explained Bourgi.

Current Traction and Operational Challenges

Currently, Djamo reports approximately 90,000 registered users and processes over 50,000 transactions each month. Achieving this growth has required significant ingenuity in its operational strategies.

Unlike Nigeria, which boasts established payment infrastructure providers like Flutterwave and Paystack, Ivory Coast lacks comparable well-known entities.

“We rely on a few providers, but their reliability can be inconsistent. However, this is less of a concern for the end-user; we are determined to make it work,” said Bamba, the company’s CPO and CTO.

To maintain operations, Djamo frequently switches between providers. The startup has also encountered initial skepticism, a common challenge for African fintech startups. The founders had to demonstrate the platform’s security and reliability for onboarding, KYC, and transactions to both banks and customers.

Logistics and Early Validation

Delivering Djamo Visa cards to customers presented another hurdle. Bourgi explained that efficient delivery and logistics services are less readily available in Ivory Coast compared to more developed African nations.

To address this, the startup developed its own delivery application and employed in-house delivery agents. “Our aim is to ensure that customers receive their cards the day after registration,” Bourgi added.

Even before launching its minimum viable product (MVP), Djamo secured early financial validation. In June 2019, it raised a pre-seed investment of $350,000 from private investors – a substantial amount for this stage in the Francophone region.

The innovative nature of the solution and the founders’ proven track record were instrumental in securing this funding, according to Hassan.

Francophone Africa: An Emerging Market

Francophone Africa has historically been underestimated by international investors, despite indications of a growing startup ecosystem. This may be attributed to language barriers and economic factors, with English-speaking countries (excluding South Africa) contributing 47% of sub-Saharan Africa’s average GDP, while French-speaking nations account for only 19%.

However, the World Bank projects that the region will account for 62.5% of Africa’s fastest-growing economies by 2021, signaling strong potential for future growth.

With numerous untapped opportunities, underrepresented regions like Francophone Africa are poised for disruption. Investors are recognizing this potential, as evidenced by million-dollar investments in Senegalese energy startup Oolu and Cameroonian healthtech startup Healthlane in 2020.

Y Combinator and Future Prospects

Djamo, along with these other startups, is backed by Y Combinator, marking it as one of the few Francophone startups to be accepted into the accelerator program. With this Winter 2021 batch, Djamo becomes the first fintech startup from the region to receive Y Combinator backing.

Following Healthlane’s acceptance in 2020, it also represents the first time French-speaking Africa has had representation in the accelerator for consecutive years.

The founders view Y Combinator’s support as validation of their belief that the distribution of financial services across Francophone Africa is undergoing a fundamental shift towards application-based solutions.

“In Ivory Coast, there’s a common perception that the banking industry is too complex to change. However, we see it as a significant opportunity and an industry ripe for disruption. Where you find frustration and customer pain, there’s an opportunity for a business to provide a better solution,” said Bamba.

Following the completion of the three-month program, culminating in Demo Day on March 23rd, Djamo will also participate in Visa’s Fintech Fast Track Program, providing access to the fintech giant’s network and opportunities to introduce new payment experiences.