Djamo is one among a number of digital banking startups focusing on Africa’s underbanked. However not like many that concentrate on massive markets like Nigeria, Egypt, or South Africa, Djamo has carved out a distinct segment in Francophone West Africa, particularly the Ivory Coast and, extra lately, Senegal. It now serves over a million prospects throughout each international locations.
The Y Combinator-backed fintech simply raised $17 million to broaden its product suite for these retail prospects and the hundreds of small companies it has onboarded within the final two years.
The fairness spherical, the biggest ever for an Ivorian startup, surpasses Djamo’s $14 million Series A in 2022 and displays continued investor confidence in its mission to make banking accessible and reasonably priced.
Co-founder and CEO Hassan Bourgi declined to share the brand new valuation however stated it has doubled for the reason that final elevate.
Bourgi based Djamo with chief product and technical officer Régis Bamba in 2020 to shut the monetary entry hole in French-speaking African international locations, where few adults have financial institution accounts. Conventional banks within the area typically cater to the prosperous, leaving a lot of the inhabitants reliant on cellular cash, a less expensive methodology that features utilizing telephone numbers to make monetary transactions.
Cellular cash has been instrumental in increasing monetary entry throughout Africa. As of 2022, 28% of adults in Sub-Saharan Africa had a cellular cash account, per the World Bank, and the area holds greater than half of the world’s whole. However that progress has additionally created a ceiling.
Most cellular cash platforms provide fundamental companies: cash-in, cash-out, P2P transfers, and invoice funds. Whereas helpful, they don’t unlock extra superior monetary instruments like credit score, investments, or long-term financial savings.
Djamo is positioning itself between cellular cash and conventional banking. The startup presents the accessibility of cellular cash with the monetary depth of a checking account, an identical playbook that Softbank-backed OPay and Transsion-owned PalmPay have used to scale to tens of thousands and thousands of consumers in Nigeria.
Its goal is a rising section of customers, principally youthful prospects, who’ve outgrown cellular cash wallets however nonetheless discover conventional banks costly, outdated, or inaccessible, the founders say.
“These customers are evolving,” stated Bourgi. “However they don’t wish to go the place their mother and father went, into establishments with predatory pricing and aren’t tailored to the brand new technology of consumers. And that is what we’re constructing, making an attempt to change into the go-to financial institution for this big cohort of consumers that’s evolving now to extra complicated, wealth-building financing alternatives.”
Increasing product suite to go well with demand
Since our last coverage, Djamo has expanded past playing cards and peer-to-peer transfers. The Ivorian fintech now presents financial savings vaults, funding merchandise — because of the area’s first fintech-issued brokerage license — and salary-linked financial institution accounts, which Bourgi sees as vital to boosting buyer engagement.
Like many neobanks, Djamo attracts banked customers who deal with it as a secondary account for smoother invoice funds and cellular cash integration. Nevertheless it’s the unbanked, harder to activate, who present larger long-term potential. These customers, who make up over 55% of Djamo’s base, typically deal with the app as their main monetary service.
Bourgi says 9 in ten customers who depend on Djamo as their primary account come from this section. To achieve extra of them, Djamo has adopted a hybrid approach, combining its app with offline brokers who meet prospects in individual to facilitate transactions, much like the cellular cash mannequin now extra broadly adopted by fintechs throughout the continent.
Presently, solely 5–10% of Djamo customers obtain salaries by means of the app. “The subsequent section for us,” Bourgi stated, “is determining methods to transfer from 10% to 50% of our customers getting their salaries paid immediately into Djamo.”
In the meantime, Djamo can be ramping up companies for small companies—about 10,000 of them, lots of whom began as retail customers. In response to CTO Bamba, the startup now supplies bulk funds, cost hyperlinks, and QR code instruments to assist retailers settle for and handle funds immediately throughout the app.
The fintech generates income from service provider charges on on-line card purchases and a premium tier plan, which 25% of customers pay for. Bamba provides that the corporate is exploring further income streams, together with lending and incomes curiosity on buyer deposits. It’s within the technique of securing licenses that can permit it to supply interest-bearing financial savings accounts and credit score merchandise.
Djamo’s founders say the corporate has grown income 5x since 2022 and processed greater than $4.5 billion in transactions since launch.
With its latest growth into Senegal, Djamo has entered a market dominated by Wave, one among Africa’s largest fintechs recognized for low-cost cellular cash transfers. However reasonably than compete immediately, Djamo positions itself as a complementary service, providing a digital banking expertise the place customers can retailer funds and entry extra superior instruments like financial savings, investments, and credit score.
Now a 250-person staff, Djamo is betting that its new spherical of funding, led by pan-African, gender-focused VC Janngo Capital, will assist it scale these companies throughout French-speaking Africa.
“We’re thrilled to steer the biggest VC spherical in Ivory Coast and double down on Djamo, a mission-driven fintech remodeling entry to monetary companies throughout Francophone West Africa,” stated Fatoumata Bâ, founder and govt chair of Janngo Capital.
“In a area the place fewer than 25% of adults have entry to formal monetary companies, and the place ladies are twice as prone to be excluded, it is a very important mission. With ladies making up a 3rd of its customers, Djamo will not be solely closing the gender hole however unlocking financial alternative at scale.”
Different traders taking part within the spherical embrace SANAD Fund for MSMEs (managed by Finance in Movement), Partech, Oikocredit, Enza Capital, and Y Combinator.
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