ZirooPay, a point-of-sale (POS) service based in Lagos and Helsinki, has secured $11.4 million in a Series A round led by Lagos-based venture capital firm Zrosk Investment Management. Existing investors Nordic venture capital fund Inventure returned, as did other private and institutional investors including Fedha Capital and Exotix Advisory.

Individual investors such as Petri Kivinen, a former managing director at Deutsche Bank, Morgan Stanley, and Renaissance Capital; Abiodun Ajai, Bank of America’s director for Sub-Saharan Africa; Kurt Bjorklund, managing partner at Permira; Stephane Kurgan, venture partner at Index Ventures; and Jonas Dromberg, a former Bloomberg Bureau Chief, also participated.

The growth capital will be used to assist ZirooPay extend its product suite and introduce new payment channels and alternatives in an effort to create an omnichannel payment system for retailers. And, as POS providers in Nigeria, particularly fintechs, increasingly focus on agency banking — a sizable fintech industry that plays a significant role in financial inclusion — ZirooPay envisions dominating an open retail space.

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Why The Investors Invested

The company has acquired considerable traction since it was founded. In 2014, the company raised $600,000 in seed capital and an additional €2 million to refine and expand its technology capabilities. Since its inception, the company’s POS machines and mobile application have been used by over 15,000 merchants. The business said, “These merchants processed $500 million — a 5,000 percent increase in three years — across 10 million transactions.”

“The growth in the online economy of the African continent has been remarkable; however, the offline economy is orders of magnitude larger than the online economy. ZirooPay has a patented technology advantage (that works without an internet connection) and distribution model that significantly increases the odds of digitizing the offline economy at a unit cost that makes the story particularly compelling. The payment space has become well-resourced and competitive, but the white space we see in the digitization of cash is the reason we are optimistic about the outlook for this investment,” Samson Esemuede, the managing director and chief investment officer of Zrosk, said. 

A Look At What ZirooPay Does

ZirooPay was founded in 2014 by CEO Omoniyi Olawale. The company develops a mobile card reader that enables small businesses to take card payments wherever they operate.

One of the primary impediments to widespread card payment acceptance in retail locations is the high probability of transaction failures owing to a bad internet connection.

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“That led to us creating our in-house technology we have a patent for that allows us to process those events in real time without internet connection,” said Olawale about his decision to make ZirooPay offline-first.

“So the product got built around that major problem; with that, we can provide a 95% transaction success rate against the less than 50% that you find in the market,” he added.

The next major stumbling block for POS terminals is functionality, or what additional capabilities they can offer beyond payment processing. Each encounter between a retailer and a customer is a goldmine of data for the payment processor and merchants. However, because POS terminals lack accounting skills, businesses either reconcile their books manually or rely on Khatabook-like systems such as Kippa to automate these procedures.

However, ZirooPay advises businesses that utilize its platform to avoid looking elsewhere. According to Olawale, the company’s mobile application enables small businesses in the retail, agency banking, hospitality, and service sectors to accomplish similar duties such as tracking sales and managing business operations.

“Think about everything that the cash registers seen in big supermarkets can do; with an Android application and a mobile point-of-sale card reader, we provide that same functionality to small businesses,” he noted.

“We’ve been able to see over 70% of our users migrate from paper-based accounting to depend on the in-app sales accounting within three months of onboarding.”

“No major company is coming in with modern technology trying to tackle this space and that’s one area that we see an opportunity for us because we are primarily a retail payment platform. Even though we provide agency banking on the side, our focus is on retail, and that’s something that differentiates us from the other players,” said the CEO.

ZirooPay POS ZirooPay POS

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Charles Rapulu Udoh

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. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh