In 2011, the Nigerian government launched financial inclusion initiative and set itself the goal of covering 80% of the adult population of the country. Although only the 64% target was achieved by the end of the decade, one positive from the exercise is that achieving financial inclusion across the country is still an ongoing process in which fintech companies have been participating alongside banks in recent years.
Agency banking startups are the main innovators in this space. Their branchless banking system, which includes thousands of physical agents, provides financial services to the unserved and underbanked in rural and semi-urban areas. NowNow Digital Systemsone such platform, launched in 2018, raised $13 million in a seed round that will allow the four-year-old startup to scale and expand its service offerings across Africa.
When the CEO Sahir Berry and its co-founder Mahesh Nair founded NowNow in 2016, they wanted to provide solutions for financial inclusion and job creation, two of the most significant pain points they felt facing Nigeria and the rest of the continent. According to Berry, in partnership with a foreign third-party partner, NowNow launched a mobile wallet in late 2017, but soon realized it needed to build its technology, setting the stage for a market launch the following year. “Doing this and building our own IP has changed our business,” the executive said. “So we started, we provided digital banking solutions to consumers and businesses. But today we are rapidly becoming an embedded financial platform.”
NowNow claims to have built a complete ecosystem of financial products serving agents, individual consumers and small businesses. Its flagship product similar to other agency banking platforms such as OPay, Team Apt, and Nomba, includes over 50,000 agents across the country that provide Nigerians with financial services such as sending and receiving money and paying bills. Fintech also has a consumer-facing product where people can send and receive money, pay bills and access value-added services such as insurance and lending through a debit card and in-app wallet. The service is available to users with smartphones and feature phones; however, for the latter, they will need to visit agents to access other services, Berry said. Similar digital banking providers in this segment include the likes of Where, carbon and FairMoney.
According to Berry, NowNow wants to differentiate itself from the competition by developing NFC-enabled technology that will enable plug-in functionality within its ecosystem of products, where users can use virtual or physical cards against an NFC-enabled phone or POS and tap from wallet to wallet using two phones. This product has been provided to several small businesses for pilot testing. NowNow, on the other hand, typically provides these SMEs with a toolbox business platform and value-added services such as a storefront and marketplace.
“It is an end-to-end integrated platform for SMEs including logistics and we are the first company in Nigeria to provide such a comprehensive platform,” Berry said. Going beyond that, since we built all this technology and own the IP for it, we have also become a BaaS company providing our product to numerous fintech companies in Nigeria and Africa. We also have reputable financial institutions that use our products to offer a white label solution to their clients. So it de-risks as we play in the consumer and B2B space.”
NowNow is targeting 5,000 SMBs with its out-of-the-box business solution, including NFC-enabled technology, by the end of the year. On the consumer side of things, the fintech claims to serve up to 200,000 customers; it hopes to increase that number to 1 million by December. “We’re on track to close about $5 billion in GMV by the end of this year across all platforms,” Berry added.
With the newly secured funds, NowNow plans to expand its platform, team and marketing to the scale that the company is “now ready to embrace.” The fintech recently selected for participate in Mastercard Start Path Global seed program, Series A and later-stage startups, is also looking to introduce new products to enhance its existing consumer banking, agency banking and merchant payments solutions and expand into African countries where fintech companies from Nigeria they rarely move: Angola and Liberia.
“We want to work in countries where we find that the infrastructure is paralyzed and requires fintech to step in and see what solutions can be provided to resolve the situation. Angola is one of those places where we found the digital payments space to be quite lagging and we may launch there in the next month. Liberia is another country where we are preparing to start operations.”
The seed round welcomed participation from several firms, including lead investors Dubai-based venture capital firm and studio NeoVision Ventures, India-based DLF Family Office and Shadi Abdulhadi.