Nigerian tech startup, Paga, has acquired an Ethiopian-based software development firm, Apposit, which has been working closely with it since 2010. The Ethiopian firm had helped build Paga’s payment platform.
Details: Though the acquisition fee was not disclosed, Apposit is expected to play a crucial role in Paga’s progress. The deal was sealed at a period Paga was planning to branch out, with plans to establish subsidiaries in Mexico and Ethiopia.
With this development, Apposit will now be fully involved in Paga’s payment platform. The acquisition of the firm comes after Paga raised $10 million Series B funding. The company had announced that it would invest in the expansion of its operation.
What Paga stands to gain: Apposit is the tech startup that digitized the Ethiopian Commodities Exchange. It has about 63 engineers and technicians in its software development company; these engineers and technicians will now be at the disposal of Paga, so their expertise will be available for the company’s product development.
Note that Apposit also has a stake in Paga. Speaking on the consolidation with Paga, the founder of Apposit, Adam Abate said, “We aligned ourselves as African entrepreneurs…which then developed into a close relationship where we became…investors in Paga and strategically aligned.” Other co-founders of Apposit are Simon Solomon and Nigerian, Eric Chijioke, who is also Paga’s CTO.
What you need to know: Abate will become the CEO of Paga Ethiopia once the operation starts in the country that boasts of the seventh-largest economy with 100 million population. However, Ethiopia has less than 1% of the population using mobile-money, whereas, in Kenya, 73% of the population are mobile payment users.
[READ MORE: Paga records over $2 billion worth of transactions in 2019)
Speaking on Paga’s expansion, Tayo Oviosu said, “There are very large countries around the world in Africa, Latin America, Asia where these [financial inclusion] problems still exist. So our strategy is not an African strategy…We want to go where these problems exist in a large way and build a global payments business”.
Nairametrics had reported that Paga recorded $2 billion transactions through over 14.4 million customers utilising the company’s platform. This makes it $6.6 billion worth of transaction processed by Paga since it went commercial in 2012.
Fintech market becoming competitive: The fintech market in Nigeria is becoming saturated as well as competitive, so tech startups are beginning to seek growth in countries where tech hasn’t become a payment solution. Although Nigeria’s financial inclusion isn’t at 80% yet – which is the projection of the Central Bank of Nigeria (CBN) – the market is already flooded by tech startups like Paylater, Paystack, Flutterwave (which recently raised $35 million) and many more looking to tap into the financial inclusion gap in return for financial opportunities.