Fintech companies dominate the tech ecosystem in Africa, with Nigeria alone home to over 200 fintech startups, according to McKinsey.
There is an ever-growing need for the digitisation of financial transactions, and it is the burgeoning payment sector that leads fintech operations on the continent.
Four of Africa’s six unicorn startups are payment-focused fintechs.
Prominent in Africa’s payment space is Cellulant, a payments service provider with an active presence in over 14 African countries including Nigeria, Kenya and Egypt. Cellulant digitises financial services for SMEs and large corporations through its multichannel, online/offline payments platform, Tingg.
Recently, the company saw a change in leadership, with Akshay Grover taking over as CEO from co-founder, Ken Njoroge.
In a chat with Technext, Akshay elaborated on Cellulant’s next phase, expansion plans and the company’s approach to solving certain challenges peculiar to fintech operations in African markets.
Cellulant 3.0: Dominating Africa’s payment space
Starting out as a music streaming business before pivoting towards e-payments, Cellulant’s third phase is about becoming the foremost digital payment platform in Africa.
Akshay explains what this means for the company.
We want to partner with large enterprises like Emirates, Ethiopian Airlines, DSTV, Bolt, to process payments for them. Partners could be large, medium or small retail African businesses where we are enabling these merchants to digitize their current cash transactions.Akshay Grover, Cellulant CEO
“We also seek to power digital payments for banks and financial institutions for the longest time. These banks have been moving towards digital, but we can accelerate that as a partner,” he added.
Cellulant’s operations currently extends to 50% of banks on the continent and serves 33 of Africa’s largest mobile-money operators.
Akshay noted that the company is looking to power more digital banking platforms, thus enabling payments to merchants, settlement of bills, utilities and insurance offerings for these financial institutions.
Expanding into new markets
As part of expansion plans, Akshay says Cellulant has launched in six (6) new countries on the continent. Cellulant is now present in as many as 18 of 54 African countries.
“The new countries that we are opening up in are Senegal, DR Congo, Ivory Coast and Ethiopia on the Eastern side. On the Northern side, we’ve added Egypt and Morocco,” Akshay said.
He goes on to stress that Cellulant has become a little more aggressive in some other African countries, where the company has now formally applied for a Payment Solution Service Provider (PSSP) licence. The licence empowers the company to provide a much wider range of financial services in these markets.
Akshay mentions that Cellulant recently got a PSSP licence in Ghana.
Responding to what the pulling power is in the new countries, the CEO points out two major factors. First, he mentions the size of these markets and the opportunity within that space in terms of digitising payments. For instance, 300,000 SMEs account for 90% of businesses in Senegal.
Second thing is, we’re realising that as we go deeper into the payments business, that a lot of our customers, especially the global customers, would like Cellulant to provide them services in several markets. If in 10 markets, for example, Emirates wants to offer digital payments for their customers booking tickets out of Morocco, Senegal or DR Congo, whatever the case might be, can we be a payments partner for that?Akshay Grover
“In a way, we are trying to answer that question for some of these global and regional merchants, because we are saying if they connect to us, they can collect payments now in 33 countries including the new markets we’ve added across Africa. That is a very powerful statement for them. It also saves them a lot of trouble trying to find different payments providers across different countries,” he added.
While Akshay admits that Cellulant is looking to raise some external financing to drive expansion, he dispels reports of a $150 million round being in the works.
“We actually never disclosed any figure at this point. Yes, it is true that we would aim to do a fundraise, expand our service offering, expand our presence and acquire new customers. What I can say is that we definitely would raise capital, in the coming months, maybe Q4 of 2021 or Q1 of 2022. And that to me seems imminent.”
Navigating Africa’s unique fintech challenges
Speaking on some of the biggest challenges Cellulant faced during previous expansions, Akshay cites regulatory constraints around foreign exchange, foreign capital remittances and fintech operations.
“So, there are these grey areas around regulation, which sometimes are not very clear, for businesses like ours which are relatively new age. I think the framework around regulation can be a little more evolved,” he said.
The Cellulant boss then explains how the company has aggregated these experiences to drive its ongoing expansion across Africa.
As a business, we are very committed to strong governance and strong internal processes. We’ve aimed and succeeded at significantly strengthening those as we grow and expand. We have, because we are a business that’s in multiple geographies.Akshay Grover
“If we have a learning in Tanzania, we try and adapt that learning into how we as a group operate. If we find a weakness in Ghana, we try and adapt that learning into our system processes. That’s exactly what we’ve been doing, for many months.”