In a landmark move within Nigeria’s rapidly evolving fintech landscape, blockchain payments platform Bitmama Inc. has officially acquired Payday, a virtual card service provider. This strategic acquisition, facilitated through Bitmama’s cross-border payments product Changera, is set to redefine the industry and consolidate blockchain payment solutions.
The acquisition comes on the heels of Payday’s impressive $3 million seed funding round merely nine months ago and follows three months of exploring potential sale options. While the financial terms of the deal remain undisclosed, a reliable source close to the matter indicated that acquisition talks were initiated just a few weeks ago and are currently at an advanced stage, approximately 85% complete.
Changera, Bitmama’s flagship product launched in 2021, is poised to integrate key personnel from Payday, spanning departments such as marketing, customer service, and engineering. The integration process is already underway, with Payday employees transitioning to Changera. The fate of Payday’s CEO, Favour Ori, known for his strong technical background, remains uncertain, but indications suggest a potential departure given Bitmama’s established leadership and robust technical team.
For Payday’s 300,000 customers, now under Changera’s care, the transition promises continuity with no immediate noticeable changes. The move is anticipated to address operational challenges faced by Payday, including industry-wide charge-back fraud issues, disruptions in Mastercard services, and senior team exits earlier in 2023.
Bitmama’s management assures that Payday’s brand will persist, operating under the broader umbrella of Changera and supported by its stablecoin infrastructure. This integration aims to enhance customer experience and service reliability by mitigating Payday’s dependence on third-party integrations.
In the short term, no alterations are planned to Payday’s fee structures or terms of service. However, customers can expect an expanded suite of services and potential new features as the integration progresses, leveraging the combined strengths of Bitmama and Payday.
Post-acquisition, Bitmama sets forth an ambitious roadmap, highlighting the development of a groundbreaking solution aimed at enhancing FX transactions for African businesses. The solution, slated for launch in Q1 2024, is expected to address critical market needs, facilitating smoother and more efficient B2B cross-border financial interactions.
This acquisition aligns with a broader trend of strategic consolidations within the fintech industry, reminiscent of Chaka’s acquisition by Risevest in September 2023. The trend underscores the growing inclination of fintech companies toward strategic partnerships and acquisitions as a means to overcome market challenges and scale operations.
Background on Payday’s Journey and Achievements
Founded in June 2021 by CEO Favour Ori, Payday embarked on a mission to create the African version of PayPal. Despite facing initial challenges and strategic shifts, Payday secured notable investments, with Moniepoint Inc. leading a $3 million seed funding round in March 2023.
Payday’s innovative approach to global payments accounts denominated in USD, EUR, and GBP garnered attention, attracting over $5 million in funding to date. The fintech company, headquartered in Kigali and Vancouver, strategically narrowed its focus to Nigeria after joining the Techstars program in Toronto.
With an initial modest customer base, Payday experienced rapid growth, currently serving 300,000 users and processing an impressive average of 40,000 transactions daily, totaling over $25 million monthly. The fintech’s profitability, achieved in August 2022, defied its burn rate increase due to an intensive marketing campaign.
Payday’s strategic partnerships, including collaboration with SpaceX’s Starlink, showcased its commitment to innovation. The fintech’s foray into social media marketing further solidified its market presence, with the company’s leadership expanding to include experienced professionals from global fintech Revolut, Nigeria’s Bank of Industry, Goldman Sachs, and Expedia.
This acquisition by Bitmama marks a pivotal chapter in Payday’s journey, unlocking new possibilities for both companies and signaling a transformative period in Nigeria’s fintech ecosystem.
Payday Bitmama Payday Bitmama
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard