Saturday, May 18, 2024

Report How A Kenyan FinTech Startup Cellulant Has Managed to Dominate Payments on 35 African Countries

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It is 19 years since the seed that would grow into a thriving continental payments solutions provider was planted in the fertile minds of co-founders Ken Njoroge and Nigerian national Bolaji Akinboro.

Over that period, Cellulant has grown in length and breadth to become one of the most consequential payment gateways for global, regional and local businesses, enabling them to collect payments online and offline, while at the same time granting latitude to customers to submit payments through any channel of their choice.

As a testament to its bullish footing in the business ecosystem, the firm hit the airwaves in 2018 when it closed a $47.5 million (Sh7.1 billion in current exchange rates) Series C round, which was the largest amount ever raised by a fintech entity at the time, signalling investor confidence in its model.

But the ride has not been without turbulence. About two months ago, Cellulant announced that it would be axing 20 percent of its workforce in a move that it said, was aimed at helping it adopt a product-led business structure, but one that pundits saw as sending disturbing signals of a distressed entity.

Settling down for an interview with the firm’s chief revenue officer (CRO) David Waithaka, I seek to unpack what really the scope of work entails.

“I can sum up our work by saying that we enable businesses to pay and get paid,” he answers succinctly.

The response is not satisfactory, so I query further.

Unified formula

Mr Waithaka explains that due to the fragmented nature of African economies, businesses operating across the various markets on the continent are often unable to have a unified formula of collecting payments from customers and submitting the same to their creditors.

Waithaka adds that Cellulant, which has a footing in over 35 African countries, thus comes in to provide an integrated payments system that is able to standardise all the payment channels across various markets and provide users with one unique collection gateway.

“The fragmented space creates a niche for businesses like ours. We get into the disjointed space and create a unique payment gateway, where a merchant or a business wanting to collect anywhere in Africa will just need to integrate into us and we’ll take care of everything,” states Mr Waithaka.

“The same applies to businesses that wish to issue out payments, for example, a ride-hailing company wishing to pay drivers across, say, six different markets.”

On the currency question, Mr Waithaka expounds that the firm is able to receive payments in a given country’s legal tender and deliver it to the intended recipient in the desired currency in their own country.

But has it all along been this flawless? Where did it all begin?

“We started off this business back in 2004 and it was not a payments gateway firm. If anything, it was hard to conceptualise that there would be things like payment gateways that will rise in Africa,” he reminisces.

“We were a digital content business and our App was actually selling music and ringtones. So we ended up being a digital content service provider or a music service provider, selling ringtones and Skiza and all those things.”

It is at this point that the operators started encountering challenges around how to collect money, as they used to bill their customers using mobile phones’ airtime.

Being the very preliminary stages of mobile phone use in the country, Mr Waithaka says it was hard to find a customer with substantial amounts of airtime, like say worth Sh100, further magnifying the billing challenges they were already grappling with.

The business executive further details that they then started approaching banks with a view of trying to see if they could get alternative ways of billing for their services.

“So we were asking the banks whether we could take the amounts that we wanted to bill from the customers’ bank account. And in that journey, we actually realised that there were other problems that we could solve outside our business scope,” he states.

“By the time we were talking to the first two to three banks, we realised that there was an even bigger problem than trying to bill for music and this was enabling banks to serve their retail customers.”

The firm then created a platform that initially would only allow bank customers check their account balances and within no time onboarded over 60 banks in Africa.

It’s from there that the company started developing the platform further to allow for expanded services spanning purchase of airtime top-ups, payment for TV subscriptions, power bills and other digital services.

“So that was our phase two journey of enabling digital consumers interact with their bank. And then of course, you can imagine what happens naturally. If a consumer can pay for power, can pay for water, can buy airtime and can move money, the next question is how they can actually go to a website and pay using the same credentials,” says Mr Waithaka.

Singular challenge

It is then that the team started approaching airlines who were then faced with the singular challenge of determining how to collect payments from travellers in the various countries in which they operated.

“So these airlines would come and say, ‘Is it possible that I can get a single integration into you? You seem to have some coverage. It may not be 100 percent, but you seem to have some coverage that allows me, on day one, to access a 100 payment channels at a go.”

So that’s how we started off what I’d call our third wave, which is then targeting a very specific customer, who is a global customer that was looking to collect in Africa, and looking for single integration,” he notes.

After getting into the real payment business, the firm has continued to spread its wings across economic sectors and markets, establishing presence in 35 countries on the continent and integrating over 250 payment methods.

“On our payment gateway, spread across all these 35 countries, we collect for more than 2,000 of the largest businesses,” says Mr Waithaka.

Samuel Musila
Samuel Musila
Passionate Software Developer and Tech content creator From Nairobi, Kenya

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