Three out of every 10 payments in Africa fail, according to reports. The factors behind this range from a fragmented payments environment and invalid cards to passive accounts and higher dispute rates; they occur every year, resulting in a loss of $14 billion in recurring revenue for digital businesses across the continent.
These issues are bound to increase as digital payments in Africa continue to grow, 20% year-on-year, according to some reports. And while gateways and aggregators have made it easier for businesses to accept multiple payment methods, few solutions exist for aggregating them out of necessity and dealing with failed payments that arise from each platform. Here’s where Reviewa South African payment and collection API company, is emerging. The financial technology that makes it easier for businesses in Africa to connect to multiple payment methods and manage failed payments has announced that it has raised $1.1 million in seed funding.
Fintech investor SpeedInvest led the round, with participation from Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also participated, including payment and revenue recovery experts from Sequoia, Quona Capital and Circle Payments, according to a statement shared by the startup.
Revio was founded by Ruan Botha in 2020. As a professional who has worked in South Africa’s banking and insurance industry for over a decade, Botha decided to launch Revio after seeing how much time and manual effort businesses spend engaging customers on outstanding and failed payments. It was clear that very few companies had meaningfully invested in revenue recovery. When they asked over 25 customers where they would invest $1 if they had to fix their payment systems, most of them said they would spend at least 90% of that money on managing failed payments and customer churn.
“We have the debit order as the largest recurring payment method in South Africa. But the moment businesses wanted to start adding other different payment methods to keep up with customer demand, it was super hard for them to do that,” Botha said in an interview with TechCrunch. “And this was only because of the lack of connectivity between banks, new financial technologies and payment aggregators, which also made it difficult for businesses to collect recurring revenue on an ongoing basis. So with Revio, we wanted to make it super easy for businesses to connect all the payment methods they need, not just in South Africa, but across the rest of Africa as well as globally.”
Botha is joined by three executive directors who manage the company’s affairs: Chief Commercial Officer Peter Grobbelaar, former presenter at Flutterwave; chief technology officer Kyle Tituswho has experience working with fintech and venture studio and COO Nicole Dunna venture builder and operator who has worked with numerous African startups.
Dunn, speaking to TechCrunch alongside Botha, said that Revio aggregates and organizes a number of different payment methods in Africa, including card, bank transfer, debit order, mobile money, vouchers and QR code. The platform collects and settles payments in more than 40 markets through payment providers such as Flutterwave, Salary, Ozov and Stitch. Some of its features, in addition to multiple payment methods, include smart payment routing, automated billing processes, automatic retirement, and real-time analytics and reporting.
In over a year of operations, Revio has onboarded over 50 customers and processes thousands of transactions monthly. They range from large enterprises to mid-market and fast-growing corporations that are associated with businesses with recurring revenue and high transaction volumes, typically requiring multiple payment methods in multiple markets. These are often insurers, telecommunications companies, retailers, subscription software or media, asset leasing or financing businesses, and alternative lenders.
“Then we built an orchestration capability where we can reduce failed payments through things like intelligent transaction routing, intelligent retries to make sure the customer doesn’t get stuck, particularly with recurring payments,” Dunn said . “And then where we differentiate ourselves is that we serve the recurring revenue business instead of the typical e-commerce platforms.” She adds that Revio has over 100 customers waiting to be onboarded.
Payment orchestration is becoming increasingly important in today’s world where businesses operate in multiple countries and need a range of payment methods to keep up. While several such platforms exist in the US and Europe to handle this heavy lifting through federated payment APIs such as Primer, Scattered and Zoozbusinesses in emerging markets are starting to see identical platforms like Revio and Egypt-based MoneyHash occupy a central place in different regions.
On the topic of competition and how it stands out, Revio claims to be the first African payments platform focused on failed payments and revenue recovery. “We also have more functionality and coverage in the context of Sub-Saharan Africa, Sub-Saharan than other platforms in the market,” Dunn added. However, the global payment orchestration market is reportedly growing at a rapid pace (according to a study, market size expected to reach $6.52 billion by 2030, advancing at a CAGR of 24.5% from 2022 to 2030) and there is more than enough room for newer platforms to grab market share – and incumbents like Revio to deepen their reach.
That’s one of the reasons the two-year-old fintech company raised this capital: to move into new markets in and outside of Africa, expand its team in the process, and launch new products for its growing clientele.
“I would say the investment to use is two-fold,” Botha said. “One is to get access to more strategic skills around machine learning and data to help us grow and drive better customer engagement, understand why they fail and how to get better response rates. With the data from this we can start our experiments in some of the main markets in Africa. We want to operate in about 13 African countries in the next 18 months, but we are focusing on three or four big markets. And then to get enough traction to be able to take on other emerging markets like Latin America.”