South African Chat Commerce Platform Clickatell Raises $91m To Explore US

Clickatell, a pioneer in the mobile communications and chat commerce field that enables businesses engage with their customers through mobile messaging platforms, has announced a new funding round of $91 million.

“In many ways, we’ve kind of had to wait for the market to come to us because if you have the first mover, you can also get too far ahead of the pack and find yourself in a desert,” Pieter de Villiers, the company’s founder and CEO, said, on the company’s journey from enabling client contact via chat to payments. “We had to wait for things like the WhatsApp channel to open up. And two years ago, we were the first company in the world to launch payments initiated out of WhatsApp and chat banking.”

Arrowroot Capital led the Series C round, which comes a decade after the Sequoia-backed company raised its last round, with Kennedy Lewis Investment Management, Endeavor Global, and Harvest also participating.

Pieter de Villiers, Clickatell CEO
Pieter de Villiers, Clickatell CEO

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The Series C funding will be used by Clickatell to extend its presence in the United States, scale its sales and marketing operations, and expedite the development of its chat commerce product in South Africa and Nigeria.

Clickatell raised $12 million in a Series B investment in 2011 from Sequoia Capital and other investors to go beyond customer involvement and include payments in one of its many services.

Why The Investors Invested

The company has seen significant growth since its founding two decades ago. For instance, for more than a decade, Clickatell claims to have produced double-digit profitable growth. It has processed over 30 billion interactions and 2 billion commerce transactions since 2020, according to the business. Clickatell covers 17 million end customers in Nigeria alone, with up to 1.3 million payment transactions every day.

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“Clickatell is an inspiring example of how a company from South Africa can pull the future forward. Clickatell was the pioneering company that successfully first sent messages from the internet to mobile phones, and today they power some of the biggest names in communications, like WhatsApp,” said Allen Taylor, Endeavor Catalyst managing director, in a statement.

The California-based company sought funding to go public in the United States in 2019, but given its recent private capital round, that listing has yet to happen. Clickatell’s chief executive de Villiers explained that the 22-year-old company needs safe capital to test new products “in a field that is just beginning,” but he is optimistic that the company’s next round will be public.

A Look At What Clickatell Does

Clickatell was founded in South Africa in 2000 and is based in California, with operations in Nigeria and Canada. Pieter de Villiers, the firm’s founder and CEO, stated he founded the company to interact with the internet, which is the fastest-growing commerce platform, and the mobile phone, which is the fastest-growing communications platform.

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As a result, Clickatell became the go-to API interface for businesses to send messages to their clients, resulting in significant increases in customer engagement via SMS.

Consumers can use its platform to find goods and services, make purchases, track orders, and address concerns with brands via SMS and USSD (in Nigeria) and WhatsApp (in South Africa).

Through its chat commerce integration with ABSA Bank, one of South Africa’s top banks, the firm claims to have created one of the world’s first conversation banking solutions on WhatsApp.

Chat2Pay was introduced in September by Clickatell in collaboration with Visa’s fraud monitoring platform, Cybersource, to enable chat commerce and make contact-free payments for businesses in the United States. The cooperation expands the payments giant’s acceptance of payment options other than credit cards and physical point-of-sale terminals.

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“We believe that chat commerce has the potential to be larger than e-commerce for the simple reason that already today, there are more people on chat than the internet, in fact almost twice as many. And so when Visa thinks about the future, and how do they serve their customers across multiple payment instruments, they decided to partner with us,” he said.

This alliance has a massive market opportunity. In the next five years, the global contactless payment market, which was worth $12 billion in 2019, is predicted to grow to $52 billion. Visa merchants and partners in 190 countries would be able to use the newly released platform as a result of the cooperation.

Clickatell chat ecommerce Clickatell chat ecommerce Clickatell chat ecommerce

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