Cinetpay has received $2.4 million seed funding. The payment gateway startup enables e-merchants and merchants in Francophone Africa to take mobile money and other forms of payment.
Pan-African venture capital fund 4DX Ventures and unicorn Flutterwave are the investors in the round, and it marks two milestones for the duo. CinetPay is the company’s first investment into the Francophone world.
Idriss Monthe and Daniel Dindji created CinetPay in 2016 after CEO Monthe had trouble collecting payments at his previous startup, CinetCore, which specialized in the acquisition of online domain names.
“After registering multiple PayPal accounts that were denied by PayPal because we were in Africa, we had problems collecting online money when we opened our website to sell domain names online.”
“However, we pay a price since in Francophone Africa, 80% of the population has a mobile money account.” A bank account and credit cards are held by between 10% and 20% of the population. We decided to look into the field of mobile money and design a payment gateway that would allow merchants in Francophone Africa to accept online payments.”
The Ivory Coast-based startup serves as an online and point-of-sale payment solution for merchants in nine French-speaking African countries: Ivory Coast, Senegal, Cameroon, Mali, Burkina Faso, Togo, Congo, Guinea, and Benin.
Merchants must first create an account on the platform, then upload their KYC, integrate Cinet’s APIs, and begin accepting payments. Cinet receives a 1-1.5 percent commission on each transaction and each merchant pays a $20 annual subscription fee.
E-commerce platforms and digital public services, as well as insurance companies and schools, are among the merchants on the platform. Over 12,000 merchants have registered on the network since its debut. Monthe admits that just 400 of them are currently active. When asked why the company’s retention rate was so low, he explained that most active merchants had previously opened numerous accounts before settling on one.
It’s also possible that CinetPay’s stats reflect the presence of larger payment gateways like MFS Africa and PawaPay, which target the 562 million registered mobile money accounts in Sub-Saharan Africa.
Despite this, the company has done well on its own. It has completed over 30 million transactions for these 400 active merchants so far, averaging roughly $12.5 million each month.
“We’ve been following the Francophone Africa industry for a while now, and CinetPay’s ambitious goal of digitizing payments across the area has impressed us,” said Walter Baddoo, co-founder and general partner at 4DX Ventures. “We’re excited to work with the CinetPay team, as well as our long-time portfolio firm Flutterwave, to usher in the next phase of digital payments in the Francophone region.”
Flutterwave’s participation in the round is a continuation of the unicorn’s cooperation with CinetPay, which began in 2019, according to a joint statement from the two firms. It’s also a departure from Flutterwave’s recent mobile money initiatives, which included a deal with MTN to allow businesses in specified countries to receive MTN mobile money (MoMo) via the gateway.
The investment in CinetPay, according to Flutterwave CEO Olugbenga “GB” Agboola, is an example of the two companies’ shared ambition to “simplify payments on the continent.”
CinetPay claims that the seed investment will allow it to expand its sales and marketing operations across West and Central African regions.
Despite the fact that the company is smaller than its competitors in terms of scale, Monthe believes that its geographical presence, technology, and aim to “simplify payment and make it available across all channels” set it apart from the competition.
In the long run, the goal is to become the most used payment gateway in the next four years.
“By 2025, we want to be the first payment aggregator in Francophone Africa,” says the company. In terms of geographic presence, we are the first in Francophone Africa, with 15 nations. He exclaimed grandiosely, “First in terms of invention, first in terms of market share.”