Nomba, a Nigerian fintech startup has secured $30 million in a pre-Series B funding round aimed at enabling the company to provide customized payment solutions for African enterprises. The funding round which was led by Base 10 Partners, a San Francisco-based venture capital firm has raised Nomba’s valuation to over $150 million, according to YCombinator’s list of top-valued companies.
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Partech and Khosla Ventures, investors in Nomba’s $5 million Series A round in 2019, also participated in this funding round. Additionally, new investors like Helios Digital Ventures and Shopify joined in, with the latter potentially making its inaugural investment on the African continent via the Nigerian startup.
In commenting about the funding, Yinka Adewale, the CEO of Nomba noted,
“We see payment as a business model, not just a product and we want to make it easier for businesses to take advantage of all that is possible in their payment processes to support their continued growth and success. We have a long list of products we have been working on and the funds we have raised as well as the investors that have backed us gives us a lot of confidence about what can be achieved with more effective payment solutions in the hands of business owners.”
Also commenting on the investment, Luci Fonseca, a partner at Base10, noted,
“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.”
YC-backed Nomba was formerly known as Kudi until May 2022 when the company was rebranded. The company which was founded by Adeyinka Adewale and Pelumi Aboluwarin in 2016 started off by providing chatbot integration for responding to financial requests on social apps. However, this business model failed to scale and two years after launch, Nomba pivoted to agency banking.
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Nomba provided POS terminals to thousands of individuals and small business owners, who acted as agents, to deliver crucial financial services like cash withdrawal, transfers, and bill payments to unbanked and underbanked Nigerians. With this business model, Nomba is now a direct competitor with OPay and MoniePoint.
Nomba’s services are offered to three business segments, which are categorized based on their turnover, with each segment having access to different types of payment solutions and software tools. The first segment includes agents and unit merchants who operate retail businesses with yearly transaction revenues of less than $100,000. These merchants are typically equipped with a POS terminal that provides instant cash withdrawal and pay-bills features. Additionally, they receive a Nomba account and dashboard to track and monitor their transactions.
Another group consists of medium-sized businesses with yearly transaction revenues of around $100,000 to $1 million. These businesses are provided with Nomba’s POS terminals and software tools, which enable them to reconcile payments and monitor collections across multiple business outlets. The third segment comprises enterprise customers, typically multi-store businesses, with transaction revenues exceeding $1 million. These customers have access to Nomba’s POS capabilities and software tools for invoicing, order and inventory management, as well as APIs for payment processing and reconciliation, which can be integrated into their existing workflows or systems.
In an interview with TechCrunch, the CEO of the company, Yinka Adewale noted,
“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.”
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He further explained that Shopify’s participation in the funding round was aimed at leveraging the extensive experience of the global e-commerce giant in providing small businesses with tools to expand their operations.
