China-based MSA Capital continues to critically turn its investment tentacles on African fintech startups, now more particularly those with significant operations in East Africa. The venture capital firm which had previously mostly invested in Egyptian startups — Homzmart, SWVL, Flextock, Nowpay, Cassbana — including Nigeria’s AutoChek, TradeDepot and Ghana’s Jetstream, has now co-led a $9m seed investment round in PawaPay, a U.K.-based and Africa-focused payments company. 

Investment in pawaPay is coming barely a few weeks after Wapi Pay, a Kenyan startup with offices in China and Singapore, announced it raised $2.2m from investors, including MSA Capital. 

PawaPay will use the funds to grow its operational presence, acquire talent, and enter new markets.

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U.K.-based fund 88mph co-led the round with MSA, with participation from Zagadat Capital, Kepple Ventures and Vunani Capital.

“We’re making a very heavy bet on the rise of mobile money and all the complexities that arise out of mobile money and all the infrastructure that needs to be built around payments with mobile money at its core,” said Nikolai Barnwell. 

“And the way we’re looking at the continent, we’re looking at adoption rates for mobile money growing at an insane speed. It has become quite obvious that this is a very significant financial infrastructure and there’s a lot of it that’s been missing if you want to work serious volume and businesses on mobile money,” he added. 

Why The Investors Invested In pawaPay

pawaPay’s traction seems a major source of attraction for investors in this round. The startup claims to have already successfully handled millions of transactions on its rails per week across 10 countries–Cameroon, DRC, Ghana, Kenya, Mozambique, Nigeria, Rwanda, Tanzania, Uganda, and Zambia — where it maintains presence.

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But also seemingly important is the fact that pawaPay’s founder Barnwell is a member of the 88mph board of directors.  

“When we first invested in Africa in 2010, one of the key drivers was that mobile money was a superior payment method to credit and debit cards when used for online payment. So, we are excited to be an investor in pawaPay’s journey and continue to witness the development of digital infrastructure in Africa,” Kresten Buch, Founder of 88mph, said. 

MSA Capital’s penchant for payments infrastructures in Africa continues with its investment in pawaPay.

Being investors hugely focused on Africa and very familiar with the landscape, we believe that mobile money-focused fintech is not just one of the most exciting places to invest but also one of the most important bridges to ensuring financial inclusion of the billions of people across the continent. The kicker for us was that we believe in the clear mission, vision and strategy and we are confident that the pawaPay team is the best team to achieve it,” said Zagadat Capital founder Oluwatosin Ajibade. 

A Look At What The Startup Does

pawaPay, which was founded in 2020 by CEO Nikolai Barnwell, after a major split from betPawa, focuses on the mobile money infrastructure offered by African telecoms carriers (telco). Each telco in each nation offers its own unique mobile money product, resulting in a highly fragmented and opaque mobile money infrastructure across borders and telecoms.

This fragmentation makes it needlessly expensive to use and annoyingly unstable for merchants. 

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Now, customers of pawaPay may access all telco mobile money systems through a single API, allowing them to accept and transmit payments to hundreds of millions of individuals.

This with the startup’s simple API, merchants may now reach more than 300 million clients in more than 10 markets, thereby enjoying frictionless, transparent, and extremely dependable payments.

Local operations, compliance, regulatory cover, and bank accounts are all handled by pawaPay, making receiving payments in a new market as simple as pressing a button.

The company combines technological integrations from telecom companies like as AirtelTigo, Econet Wireless, MTN, Safaricom, Orange, and Vodafone into a single API for businesses.

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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