Profitable African fintech PalmPay is in talks to raise as much as $100M

Summary

PalmPay, an African digital bank fintech, is in talks to raise between $50 million and $100 million in a Series B round, according to multiple sources familiar with the matter. It’s unclear what valuation it hopes to get, but its last round, in 2021, ranked it among the continent’s most valuable startups, estimated just shy of unicorn status. While PalmPay declined to comment on fundraising specifics, a spokesperson said the six-year-old fintech is “in a strong financial position and exploring growth opportunities.” The company, which has raised nearly $140 million across its seed and Series A rounds, is now profitable, according to people familiar with its finances. The new capital, expected to include both equity and debt, will fuel PalmPay’s expansion: deepening its footprint in Nigeria, scaling its newer business-focused offering, and rolling out both products in new markets across Africa and Asia. Last month, PalmPay announced it had hit 15 million daily transactions, driven by its 35 million registered users. These transactions now add up to “tens of billions of dollars” annually in value, according to the company. Revenue has also surged. PalmPay’s revenue — $64 million in 2023, according to the Financial Times — has more than doubled since, people familiar with the company’s financials say. Launched in 2019, PalmPay started out in Nigeria, Africa’s most populous country and a major fintech hub. At the time, over half of adults in the country were unbanked, and traditional banks catered mostly to salaried or formal-sector clients, often with requirements that excluded mass-market users. PalmPay saw an opportunity to flip that model on its head: build a digital bank from scratch, but optimize it for the realities of Africa’s informal economy. The company launched an app featuring instant onboarding, zero transfer fees, and a growing suite of services (including credit, savings, insurance, and bill payments) all tailored to the needs of underbanked consumers an...