China’s Transsion Holdings, the makers of Tecno, Itel and Infinix smartphones, has entered the Nigerian fintech space after leading a $40 million investment in Uk-headquartered payment firm PalmPay.
China’s NetEase and Taiwanese wireless comms hardware firm Mediatek also participated in the seed round.
As part of the investment, PalmPay will have a strategic partnership with mobile brands Tecno, Infinix, and Itel that includes pre-installation of the startup’s app on 20 million phones in 2020.
PalmPay had piloted its mobile fintech business in Nigeria since July when it received approval from Central Bank of Nigeria to operate a mobile money business before officially launching today. During its pilot phase, the payments startup garnered 100,000 users and processed 1 million transactions.
The $40 million investment will not only be spent in Nigeria. Ghana, where PalmPay also has an office will get part of the money and will be used to grow its financial services business in the West African country.
The mobile payment business in Nigeria is getting more competitive as more local and international players are coming on board to take advantage of increasing mobile phone penetration as well as her large population.
Indigenous fintech players like Flutterwave, Paystack, PiggyVest, VertoFx, TeamApt and Carbon among others are having to compete with Africa Focused payment startups that are backed by the deep pockets of Chinese Venture Capital firms.
Recently, Opay, a payment firm in Nigeria that offers services in different verticals, received a $50 million investment led by Chinese Investors.
In the case of PalmPay, its lead investor; Transsion is the biggest seller of smartphones in the continent and even has a manufacturing plant in Ethiopia. The company raised nearly $400 million in a Shanghai IPO in September and plans to spend roughly $300 million of that on new R&D and manufacturing capabilities in Africa and globally.
Despite the competition, PalmPay CEO Greg Reeves is not bothered believing that his startup can leverage on the strategic reach and business offerings of Transsion to gain market share in the biggest economy in Africa.
Some Chinese led Startup investments in Africa