Nigerian payment service provider Nomba has raised $30 million in “pre-Series B” funding which was backed by Shopify among others. The funds will be used to support the delivery of tailored payment solutions for African businesses. Besides participation from existing investors like Partech Partners, Michael Seibel, managing director of Y Combinator and Khosla Ventures, Base10 Partners led the latest round.
Base10 Partners has also made investments in other FinTech companies like Plaid, Brex and Nubank. Besides Shopify, Helios Digital Ventures also invested in the “pre-Series B” funding. Nomba raised $5 million in its Series A round held in 2019.
Nomba’s track record of innovation and capital efficiency makes it one of the most exciting startups in Africa. We are thrilled to be supporting them to deliver their game-changing solutions to power growth and continued success for businesses in Nigeria and beyond.
Luci Fonseca, Partner, Base10
About Nomba
Nomba was co-founded in 2016 by Yinka Adewale and Pelumi Aboluwarin. While Adewale is the Chief Executive Officer, Aboluwarin is the Chief Technology Officer. The company provides tools related to banking and payments for business owners across Nigeria.
Initially, it was known as Kudi, under the name “Kudi.ai”. It worked as a chatbot integration that answered financial queries on social platforms. Later, the company worked on the expansion of digital payment solutions and rebranded itself in 2022.
Nomba’s Total Funding
So far, Nomba has been able to raise approximately $36.7 million USD in total funding. “Our core focus has been figuring out how to help small businesses essentially scale. A lot of that is hinged on what kind of software tools we provide which could potentially reduce their cost of operation and provide better visibility to their business,” said CEO Adewale in an interview with TechCrunch.
He added that the capital will be used to offer bespoke payment and operational tools for businesses such as restaurants, transport companies and logistics among others.
Talking about the investment, Luci Fonseca, partner at Base10, said, “Nomba’s track record of innovation and capital efficiency makes it one of the most exciting startups in Africa. We are thrilled to be supporting them to deliver their game-changing solutions to power growth and continued success for businesses in Nigeria and beyond.”
Nomba And Its Three Segments Of Businesses
Nomba caters to three segments of businesses which are grouped on the basis of their turnover. Based on the category, the kind of software tools and payment solutions which can be accessed are decided. The first segment comprises agents and unit merchants operating retail businesses. The annual transaction revenue of this group is usually under $100,000. They are offered a POS terminal with immediate cash withdrawal and pay-bill features along with a Nomba account. The transactions can be monitored through the dashboard.
The second segment includes medium-sized businesses with yearly transaction revenues somewhere between $100,000 to a million dollars to coordinate payments and monitor collections across different outlets. The next and last segment is multistore businesses. Their transaction revenues are more than $1 million a year. These enterprise customers are offered POS capabilities and software tools for managing inventory, invoices and orders. They also have access to APIs for payment processing and reconciliation that are embedded into their systems.
According to the fintech, more than 300,000 businesses from the above three segments leverage at least one Nomba-powered product. The company claims it processes transactions of $1 billion per month. Since 2020, the revenues of Nomba have grown 150 percent year-over-year.
Nomba MAX
Nomba plans to launch a POS device called Nomba MAX soon. With the device, the company aims to enable restaurants to perform multiple functions such as managing inventory, receiving payments and having access to menus among others. Transport and logistics companies will be able to connect their transactions directly to payments.
“We know that medium to large enterprise merchants have payment problems which are usually infrastructure based. So while our solutions help them improve success rates on transactions, we don’t think being a payment provider is good enough,” Adewale said on the yet-to-be-launched Nomba MAX. The hardware has similar features to vertical software like Orda and Vendease.
“The way we see it is that we need to build software that essentially makes us very valuable to these businesses by reducing order time and streamlining orders in one place. And we want to understand their business from the front end to the back office,” he added.
Nomba plans to explore pan-African expansion after its success in Nigeria. “We’re looking at a couple of markets, but it’s too early to share anything. It’s something that we’re spending a lot of time on.”
Other Investments By Shopify
Shopify usually invests in companies supporting the Shopify merchant ecosystem along with online retailers. In February, Shopify also participated in the funding of Triple Whale in its closing of the Series B round. Triple Whale helps online businesses by unifying business metrics into a single dashboard.
WATI, a Hong Kong-based startup, announced an investment from Shopify in October 2022. WATI provides customer engagement software created on WhatsApp Business API. Toronto digital logistics startup Swyft, and Loop, which offer an exchange-first returns platform for Shopify stores have also been backed by Shopify lately.
