Zambia's Union54 raises $12m funding, led by Tiger Global
Zambian fintech company Union54 recently raised a $12 million seed extension led by Tiger Global with follow-on participation from existing investors Vibe VC. New investors that came in were Earl Grey Capital and Not Boring Capital by Packy McCormick.
Union54 offers card issuing services in partnership with licensed card issuers. According to the Union54 CEO, Perseus Mlambo, they were initially frustrated by how long it took them to issue a debit card for their own challenger bank-like product (Zazu). So they developed Union54 to abstract card issuing as a service.
Mlambo says, ”In the last few months, we have gone on to issue just slightly over half a million debit cards and our processed volumes are now in the double digits millions. What’s more, our interactions with customers and potential customers has shown us that the real problem we are tackling isn’t the ease of issuing cards – rather it’s much more broader than we could have imagined.”
He continues, ”Our current clients represent Africa’s foremost fintechs and they are largely responsible for driving the innovation agenda across Africa. Operating in multiple African countries, our clients are telling us about the challenges they are going through. It’s getting harder and harder for them to source dollars and settlement for card transactions is taking longer and longer. As Union54, we’ve got this unique vantage point into the market and increasingly, we’ve been spending more and more time investigating what it takes to develop a common payment application for Africa.”
Mlambo says Union54 is a common payment application for Africa – or put in layman terms, a homegrown alternative to Mastercard or Visa.
He concludes, ”Longitudinally, it is impossible that Africa remains a market led by the duopoly of Visa or Mastercard. Especially given how increasingly politicised payments are becoming. And the mood on the ground matches our hypothesis – we are in touch with three central banks and are exploring how settlement agreements would work. What we have learnt in the last few months is that developing a card scheme is not a technical problem – in as much as it is a trust problem. Trusting that merchants will get settled on time, trusting that no money will be lost across the currency conversions happening and more importantly, consumers having trust in the card itself. Ultimately, the card is a physical manifestation of that trust and as such, by going through central banks, we are understanding and agreeing a common framework for the paperwork that documents and cements that trust. Our goal is to get to nine central banks by the end of the year so we can pilot a product by Q2 2023.”
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