Jumo, a South African fintech company has secured USD 55 Mn in its latest funding round, barely more than one year after shaking up the African startup ecosystem with a USD 52 Mn funding round, followed by an additional USD 12.5 Mn just three months later.
“I’m excited for our next phase. This backing will help us build a better business and break new ground. The strong vote of confidence, along with the world-class tech talent we now have in the business, means we can achieve exceptional outcomes for our partners and customers,” says
JUMO’s CEO Andrew Watkins-Ball.
Here Is The Deal
- The latest funding comes from new and existing JUMO investors including Goldman Sachs, Odey Asset Management, and LeapFrog Investments. Other existing investors in the startup include Proparco, the private sector financing arm of the French Development Agency (AFD), Finnfund, Vostok Emerging Finance and Gemcorp Capital.
- This latest investment brings JUMO’s total funding up to $158 Mn, making it one of the best-funded tech startups on the African continent.
- In 2018 alone, JUMO raked in a whopping $67.5 mn across three funding rounds.
- In 2017 Jumo won the MasterCard Foundation’s third annual Clients at the Centre Prize. The US$150,000 prize recognises the innovative work of the South African-based company as a large-scale, low-cost financial services marketplace that serves low-income people.
- JUMO plans to use the fund for expansion into new markets and to launch new products in Africa and Asia.
Why The Investors Invested
For one thing, fintech has received the greatest amount of funding in the African startup space, year on year. So, JUMO’s latest fund raise is not a big surprise for industry watchers.
‘‘By creating a customer-centric platform that enables the distribution of leading-edge financial offerings instantly and on-mobile, JUMO is generating access at an unprecedented rate. So far JUMO has analysed more than 33 terabytes of data to serve more than nine million customers in seven countries across Africa and Asia, including Tanzania, Kenya, Uganda, Ghana, Zambia and Pakistan. 100% of its customers are estimated to be low-income, earning less than $10 per day PPP, and approximately 80% have never interacted with formal financial offerings before using the platform. The company has extensive expansion plans for both Africa and now Asia, with CEO and Founder, Andrew Watkins-Ball having relocated to Singapore to drive expansion.
As an investor partner, LeapFrog’s financial services expertise is being used for product design and multi-country rollouts, to turbocharge Jumo’s growth and spur financial inclusion across Africa,’’ LeapFrog Investments notes about JUMO.
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A Look At What JUMO Does
JUMO was founded in 2014 by the South African-born CEO, Andrew Watkins-Ball. JUMO started as a mobile financial services startup company in Ghana, providing payroll loans to government and corporate workers and consumer loans to informal and market traders.
Through September 2016, it had delivered more than 10 million loans to customers in 6 countries including Tanzania, Kenya, Zambia, Rwanda and Uganda. The platform leverages an uncommon digital credit model that does not require customers to have prior financial account ownership or a credit history.
JUMO leverages mobile networks to provide loans and savings products to its customers. The digital financial services company has developed a credit-scoring algorithm that helps customers to unlock the value of their digital footprints by giving an accurate estimation of their creditworthiness.
The startup bundles products from various banks and sells it to businesses on the lookout for credit. The entire process of lending is facilitated through mobile networks, where the startup has tied up deals with a number of service providers.
Given high feature phone usage in key markets as well as customer sensitivity to data costs, JUMO offers transactional capability via basic USSD, web or app to allow seamless access and usage of the platform and products.
To date, JUMO claims to have helped millions of consumers across its six markets in Africa and originated more than USD 1 Bn in loans, having started out in Tanzania.
Since September 2018 when the startup first announced expansion into Asia via Pakistan, JUMO has moved its headquarters to Singapore while also growing to no less than 10 million people saving or borrowing from its platform. At the last count, the company had some 350 staff across 10 offices in Africa, Europe, and Asia.
‘ Building something to solve a big problem is hard… Products that are designed from positive and authentic emotions will be loved by customers…. Your customer must love your product or you don’t get the adoption you need to build a big business against sustainable demand. They must feel that you care and they must feel that the product comes from an authentic objective. A great example is Wikipedia. You can feel the social objective of the product,’’ Andrew once noted
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com