QED makes first investment in Africa, backing Nigerian fintech TeamApt in $50M+ deal TechCrunch

QED Investors, an American venture capital firm focused on fintech, has led a new investment in TeamApt, a Nigerian fintech company that provides business payments and banking platforms. The investment was over $50 million, according to sources familiar with the matter, though neither QED nor TeamApt would confirm the figure.

The company’s existing Series B investors last year (Crunchbase pegs it at $30M+) — Lightrock, BII, and Novastar Ventures — all participated in this round.

While TeamApt wouldn’t prescribe any “letter” to this latest round, it could perhaps be described as a pre-Series C round because withour sources say the company is still in the market to create the C Series next year.

“We always take an opportunistic approach to our fundraising efforts and want to make sure that the market context, business cash needs and investor profile align with our strategic growth views,” the company’s Tosin Eniolorunda said when asked if the current A market downturn has affected the company’s Series C fundraising efforts, originally planned for this year. “Given the overall cautious market environment, we have not been in active fundraising mode. As a profitable company, we didn’t need the money, but we were happy to take the opportunity to add a new well-known investor.”

Last piece of the puzzle

With almost $5 billion in assets under management (AUM) and a recently closed seventh fund of $1.05 billion, QED has backed over 180 companies (of which 27 are unicorns). In a move rarely made by Western VCs, QED announced the hiring of Gbenga Ajayi and Chidinma “Chid” Iwueke to lead its investments in Africa this January. Nigel Morrisco-founder and managing partner of the firm, in an interview with TechCrunch, said that Africa is the final piece of the puzzle to transform QED into a global fintech specialist venture capital firm.

TeamApt operates one of the largest business payment and banking platforms in Nigeria and processes an annual transaction value of $100 billion through its Moniepoint and Monnify products. Moniepoint now serves 400,000 SMEs across Nigeria, enabling them to access various operations management features: working capital, business expansion loans and business management tools such as expense management (business payment cards), accounting and bookkeeping solutions and insurance.

In TeamApt, QED finds a company that started four years ago before launching a venture round in 2019, but has grown 300% annually to build one of Africa’s largest fintech companies (by revenue and market capitalization) – and is profitable. The company generated more than $100 million in annual revenue last year and its valuation has nearly quadrupled from its previous valuation round, according to sources.

“Since our launch days, we’ve built products where we can see positive savings per unit from day one, which has continued to translate into our profitability,” the CEO said in an emailed response to TechCrunch. “This has put us in the realm of the few attractive hyper-growth companies with positive cash flow – even as we continue to grow triple-digits on a year-over-year basis while expanding our margins.”

Eniolorunda said this new round of funding will help TeamApt expand its credit offerings. The company’s loan portfolio is still small as it continues to lend from its microfinance bank affiliate’s balance sheet. But as its portfolio expands, the company plans to use multiple lending partnerships, including banks, development finance institutions and securitization structures, to access debt instruments.

QED is also a prominent credit operator and has helped develop strong credit functions for portfolio companies such as Brazil’s Nubank and India’s Jupiter, which Eniolorunda says fit TeamApt’s lead investor profile. In a January interview, QED said it expects the upcoming portfolio companies to “leverage its fintech expertise, operational expertise and willingness to roll up its sleeves” to build and scale financial products for Africa’s needs, which is right at the heart of TeamApt’s business .

Nigeria is leading the large-scale adoption of digital payments in Africa, with over $800 billion in digital transactions annually in the first four months of this year. It’s a big fintech market, with countless companies providing multiple services across the country, with Flutterwave, Chipper Cash and OPay achieving unicorn status. TeamApt, in the next rounds, could provide QED with the opportunity to carve out another unicorn.

“I am proud to bring Africa to QED and QED to Africa. I could not think of a better way to enter the continent than our investment in TeamApt,” Gbenga Ajayi, QED Investors partner and head of Africa, said in a statement. “Tosin and his team have steadily built an impressive payment and distribution network in Nigeria over the past five years. Their strong and positive unit economics, coupled with a deep customer focus, will enable them to continue to build an even wider network.”

Meanwhile, as discussed last year, TeamApt’s pan-African expansion is still in motion, Eniolorunda said; the company is heading for its first wave of international expansion within the continent in the coming months.