FairMoney, a Nigerian credit-driven digital banking platform, has acquired PayForce (a YC-backed sub-brand of CrowdForce), a merchant payment service serving small businesses.
Both startups declined to disclose the terms of the deal. However, sources said the deal was a cash and stock deal ranging from $15 million to $20 million for him. As part of the deal, CrowdForce CEO Oluwatomi Ayorinde will join his FairMoney to lead PayForce by FairMoney, the company’s payments business arm.
Most consumers and businesses in Africa remain financially underserved. With 64 million people unbanked in Nigeria, according to the World Bank, there is a huge opportunity to provide access to financial services for both customers.
FairMoney has operated a credit-driven neo-banking play primarily aimed at retail customers, while CrowdForce, through PayForce, offers agency banking services. This is a branchless banking model that extends financial services to the last mile through a network of human-her ATMs. But as several iterations, competition-driven innovations, and venture capital raisings intensify the digital retail and merchant banking space, both businesses have evolved from flagship to multi-product offerings. .
PayForce started by providing merchants with POS devices, allowing them to offer retail customers cash-in, cash-out, money transfers and bill payments while supplying liquidity through a network of partners ( The company told TechCrunch last year that it has invested in Nigeria’s agent banking network, nearly ₦1.7 trillion. Fintech, which serves over 10,000 businesses, has enhanced its product suite to include business banking, financial team tools, B2B payments and virtual cards. Last February, he raised $3.6 million in pre-series A.
FairMoney, on the other hand, started with a digital lending product covering loans of 15 days to 24 months, primarily to retail customers. Having secured a $42 million Series B in 2021, the company now offers debit accounts and cards, P2P money transfers, and payments to over 1 million retail customers and small businesses, which are key to its business. It’s a big part, CEO Lauryn Haney told TechCrunch. on the phone.
Hainy said the acquisition will provide incentives for merchants acquired by PayForce, which uses FairMoney as its primary bank, for example, an 18% annualized rate on deposits. He also said FairMoney will design specific credit products for various businesses to address one of the biggest problems facing Nigerian SMEs, he said: access to loans and working capital. I was. It’s also not surprising that FairMoney is looking to bank some of the offline customers CrowdForce has served over the years.
“We think of ourselves as a retail bank, but the lines between merchant and retail are often blurred. “We know that by combining both businesses, retailers can enjoy what their retail customers already enjoy.”
Fintech companies on the other side of the board, such as OPay and Moniepoint, are gaining retail customers as consumer digital banking startups such as FairMoney and Kuda enter business banking. However, the transition has not been smooth for most of these players, given the needs of different banks with different customer profiles in one app. FairMoney, one of his leading retail neobanks, will look to PayForce. According to Hainy, this will allow small businesses to address some pain points, understand their finances better, and generate more revenue through their “well-thought-out” products — coveted We offer a merchant-focused value proposition and strengthen our position in the country’s business banking space.
“From our perspective, PayForce has an advantage because its software is made for financial managers and small business owners,” Hainy said. I gave my thoughts on the competition. “PayForce didn’t build their product with the merchant in mind, which helps them make more profit than many of their other competitors who are considered agency banking businesses. We put it down and build the product, and I’m not worried about the competitive environment there because it’s a big difference.”
In fact, through acquisition, FairMoney hopes to gain more market share and become the ‘number one’ retail and merchant bank in Nigeria. Fintech plans to add credit cards, remittances, stocks and investment products for retail customers, and will include payroll services, BNPL and online merchant acquisition in its product suite for businesses.
In addition to building the stack, FairMoney is also actively involved in multiple acquisition talks. Sources familiar with the deal said the Tiger Global-backed fintech has raised his more than $30 million bridge round from new and existing investors to make these acquisitions (including PayForce) and sell them outside Nigeria. and are in talks to expand operations across Africa. Haney declined to comment.
Recently, acquisitions in Africa have increased. According to the report, domestic acquisitions increased by 31% in Q2 2022 and reached 52% in Q3 2022. Despite these indicators, a fundamental exit opportunity could trigger a sale in current market conditions, according to the former head of CrowdForce.
“There are many ways to win. For a startup to win, it needs a great product, strong execution, marketing, and capital. Houses can get a combined value proposition to start executing, winning and creating value for all shareholders.In a fast-paced market like Nigeria, time and speed are critical.
