Djamo is one among a number of digital banking startups concentrating on Africa’s underbanked. However in contrast to many that concentrate on giant markets like Nigeria, Egypt, or South Africa, Djamo has carved out a distinct segment in Francophone West Africa, particularly the Ivory Coast and, extra not too long ago, Senegal. It now serves over a million clients throughout each nations.
The Y Combinator-backed fintech simply raised $17 million to increase its product suite for these retail clients and the 1000’s 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 Sequence 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 nations, the place few adults have financial institution accounts. Conventional banks within the area usually cater to the prosperous, leaving many of the inhabitants reliant on cell cash, a less expensive technique that features utilizing cellphone numbers to make monetary transactions.
Cell cash has been instrumental in increasing monetary entry throughout Africa. As of 2022, 28% of adults in Sub-Saharan Africa had a cell cash account, per the World Financial institution, and the area holds greater than half of the world’s whole. However that progress has additionally created a ceiling.
Most cell cash platforms provide primary 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 cell cash and conventional banking. The startup affords the accessibility of cell cash with the monetary depth of a checking account, an analogous playbook that Softbank-backed OPay and Transsion-owned PalmPay have used to scale to tens of hundreds of thousands of consumers in Nigeria.
Its goal is a rising section of customers, largely youthful clients, who’ve outgrown cell cash wallets however nonetheless discover conventional banks costly, outdated, or inaccessible, the founders say.
“These customers are evolving,” stated Bourgi. “However they don’t need to go the place their mother and father went, into establishments with predatory pricing and aren’t tailored to the brand new era of consumers. And that is what we’re constructing, attempting to turn into the go-to financial institution for this big cohort of consumers that’s evolving now to extra advanced, wealth-building financing alternatives.”
Increasing product suite to go well with demand
Since our final protection, Djamo has expanded past playing cards and peer-to-peer transfers. The Ivorian fintech now affords 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 necessary to boosting buyer engagement.
Like many neobanks, Djamo attracts banked customers who deal with it as a secondary account for smoother invoice funds and cell cash integration. But it surely’s the unbanked, harder to activate, who present higher long-term potential. These customers, who make up over 55% of Djamo’s base, usually deal with the app as their major monetary service.
Bourgi says 9 in ten customers who depend on Djamo as their principal account come from this section. To achieve extra of them, Djamo has adopted a hybrid strategy, combining its app with offline brokers who meet clients in particular person to facilitate transactions, much like the cell cash mannequin now extra broadly adopted by fintechs throughout the continent.
At present, solely 5–10% of Djamo customers obtain salaries via the app. “The subsequent section for us,” Bourgi stated, “is determining how you can transfer from 10% to 50% of our customers getting their salaries paid instantly into Djamo.”
In the meantime, Djamo can also be ramping up companies for small companies—about 10,000 of them, a lot of whom began as retail customers. In accordance with CTO Bamba, the startup now offers bulk funds, cost hyperlinks, and QR code instruments to assist retailers settle for and handle funds instantly inside 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 strategy of securing licenses that may 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 enlargement into Senegal, Djamo has entered a market dominated by Wave, one among Africa’s largest fintechs identified for low-cost cell cash transfers. However somewhat than compete instantly, 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 crew, 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 guide 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 girls are twice as prone to be excluded, it is a important mission. With girls making up a 3rd of its customers, Djamo just isn’t 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.
