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 and small businesses.
Crucially, PalmPay didn’t rely solely on digital acquisition. The fintech built a vast on-the-ground network of over 1 million small businesses and agent merchants, who now serve more than 10 million customers monthly through the PalmPay Business app and point-of-sale devices (for cash-in, cash-out services).
Other major fintechs in the country, including OPay, Moniepoint, and Paga, have also adopted the hybrid model, combining digital apps with physical touchpoints.
PalmPay claims to process more transactions than any traditional bank in Nigeria, and 25% of its users report that it was their first-ever financial account. For credit products, offered in partnership with licensed lenders, that number jumps to 60% among borrowers, it claims.
Part of PalmPay’s strong distribution and marketing advantage stems from its partnership with Transsion, the Chinese phone maker that dominates smartphone sales in Africa, with a market share of over 40% across its brands (Tecno and Infinix).
Through the partnership, PalmPay pre-installs its app on select financed smartphones, helping drive user acquisition and engagement.
Having established itself as one of the most widely used fintech apps in the country, PalmPay is now preparing to replicate its model in new markets abroad.
The neobanking platform has expanded to Tanzania and Bangladesh (its first foray outside Africa), where PalmPay is entering with device financing and consumer credit as wedges before layering in more services. (Other African digital banks, including FairMoney, MNT-Halan and TymeBank, have expanded their financial services into Asia with varying degrees of success.)
The company also plans to introduce device financing in Nigeria, its spokesperson confirmed.
While Transsion, which led PalmPay’s seed round, remains a strategic partner, the company’s spokesperson says the fintech is actively exploring collaborations with more original equipment manufacturers (OEMs).
GIC (Singapore’s sovereign wealth fund) and Mediatek, one of the world’s largest mobile chipset makers, are some of its other investors.
On the business-facing side, PalmPay offers cross-border payments for merchants who want to send and collect payments across Africa via a single API, a recurring pain point (even with the promise of stablecoins). This newly launched business feature, currently live in Nigeria, Kenya and Tanzania (with South Africa in the pipeline), already processes “hundreds of millions of dollars monthly,” the company’s spokesperson confirmed.