Three Zambian FinTech Startups to Watch
In the past few years, there has been significant growth in the Financial Technology (FinTech) ecosystem in Zambia. Not only have more startups come on the scene but also, a good number have received notable investments to scale their businesses.
The FinTech ecosystem in Zambia continues to grow as key players such as financial sector regulators, startup incubators and venture funds work together to create an environment that supports innovation on the road to a digital economy. For example, in October 2021, Lupiya, a Zambian FinTech startup, was selected among 50 African tech-startups awarded equity-free funding from the Google for Startups US$3 million Fund. Google set up the fund to support early-stage Black-founded startups in Africa. Lupiya is a microfinance platform that uses technology to simplify the process of borrowing for individuals and businesses across the country.
Lupiya was founded in 2016 by Ms. Evelyn and Mr. Muchu Kaingu on the vision that every Zambian should have access to finance. Lupiya is notably the first Zambian company to receive funding from the international tech-giant. The funding from Google adds to the US$1 million received from Enygma Ventures, an investment fund targeting female founders in Southern and Eastern Africa, in July 2020.
Speaking on the traction gained since the Enygma injection, Lupiya Co-founder and CEO, Ms. Evelyn Kaingu, said Lupiya’s revenue has since grown by 785%. “Our loan book has grown and now serves almost 10,000 customers. Our team has also grown from 4 to 12 employees and is looking to close the year with 16,” she said. The funding is also helping Lupiya improve functionality of its platform which can be accessed via a mobile and website application. Lupiya plans to expand operations into Malawi, Tanzania and the Democratic Republic of the Congo.
In August, 2021, Union54, became the first Zambian startup (and FinTech) to get into Y Combinator. Y Combinator is a prestigious American startup accelerator that invests in a wide range of startups and has launched over 3000 companies to date. Union54 (54 representing the number of countries in Africa) is a FinTech company founded in 2021 by Perseus Mlambo and Alessandra Martini. Union54 was born from the couple’s earlier FinTech startup, Zazu. It’s goal is to provide application programming interfaces (APIs) for African corporates to easily issue debit cards. Using Union54, companies can be able to issue and manage their debit cards without needing a bank or third-party processor, saving time and money. The startup states that it is Africa’s first card-issuing API.
After graduating from the accelerator, Union54 received a US$3 million seed round from Tiger Global, an investment firm with a focus on firms in global internet, software and financial technology industries. It plans to use the funding to source the best talent in product development, engineering, marketing and sales to build solutions and gain traction.
The Zambian FinTech company also received funding from angel investors such as Babs Ogundeyi, the CEO of Nigerian Neobank Kuda; Risana Zitha, managing director of Renaissance Capital; and Gbenga Ajayi, former director of SMB Growth at Wise. Union54 looks to expand its customer base in Zambia, regionally, then to the rest of Africa.
In March this year, Premier Credit, another Zambian FinTech startup focusing on microlending, secured a US$5, 000 grant from the FinTech4u Accelerator run by The UN Capital Development Fund and BongoHive Innovation Hub. Through the accelerator, Premier Credit also had access to free legal clinics, sales and marketing tools and had industrial sessions with regulators such as the Securities and Exchange Commission and Bank of Zambia necessary for its business.
The company which was founded in 2019 by Ms. Chilufya Mutale and Mr. Eugene Mwila offers affordable microloans to micro, small and medium enterprises (MSMEs) and low-income earners. Prior to the FinTech4u grant, Premier Credit received a seed fund of $650,000 from Enygma Ventures in 2020. The company currently operates in Zambia and Zimbabwe. It plans to become a challenger bank for small and mid-size enterprises (SMEs).
“SMEs form the backbone of our economy and providing an enabling environment by way of digital financial services that are easy to access, affordable and efficient will greatly contribute to financial inclusion and a cashless society,” said Premier Credit, Co-founder and CEO, Ms. Chilufya Mutale.
With 30% of the Zambian adult population still unbanked, the opportunities for FinTechs remain vast.