Paga, a leading Nigeria payment company recently acquired an Ethiopian software development outfit, Apposit and has built a solid foundation since the former’s inception in 2009.
Although the CEO and CTO Tayo Oviosu and Eric Chijioke of Pagatech respectively have been looking to partner with a software development company in order to improve their product, Jay Alabraba, co-founder of Pagatech Limited, the parent company of Paga reported saying“When we started, the plan was to buy the licensed software. We identified a partner and Tayo and Eric went to India for about two weeks so that they could configure the platform to serve Paga. Based on our requirements, they asked the partner what kind of effort was required to deliver what Paga wanted and he said they’d have to rebuild the whole software. We decided to just build it ourselves”
Apparently, Chijioke had also been a co-founder at Apposit alongside Adam Abate and Simon Solomon since 2007 which made it very easy and straightforward for Paga to task Apposit with building and maintaining its payments platform since it already had a technical team in Addis Ababa. With the relationship getting stronger, Apposit staffed 25 software developers to exclusively work on the Paga platform. Although most of its engineers are still based in Ethiopia, this enabled Paga to establish a development team in Nigeria. Apposit was also a seed investor in Paga and served as an advisory body to the payments company.
With this new bond that has been created between the two companies, there has been a sort of huge success. The payments company has gone on to raise $35 million and Oviosu says the company as processed 104 million transactions worth $6.6 billion. During its series B2 round of $10 million in 2018, the company plans to take a dive into other markets in and out of the continent — specifically to Ethiopia, Mexico, and the Philippines.
Paga is relentless about its success and plans to complete its expansion this year. Just this month, Ian Cleverley has been hired as Group CFO to help with his vast industry experience.
Paga also announced its acquisition of Apposit to hasten its expansion into Ethiopia and East Africa. This acquisition will bring about Apposit’s 63-man engineering team that will be incorporated into Paga as the payments company will start operations in Ethiopia when it obtains a local banking license. Also, Adam Abate will become the CEO of Paga Ethiopia.
Worthy of note is that mobile money platforms in Ethiopia are owned by the banks as fintech companies can only provide technology services to these banks.
However, the country’s central bank — the National Bank of Ethiopia — is said to be putting up a framework expected to allow fintech companies in the country to offer financial services to customers.
Pending on when this framework is passed into law, Paga might only be able to operate as a financial technology provider to banks in Ethiopia, a different model to what the payments company is accustomed to in Nigeria.
Ethiopia is predominantly a cash-based economy unlike Kenya, which is known for its mobile money market. How paga Nigeria acquired Apposit and the relationship formed will, therefore, present a good opportunity for Paga to gain market share in the East African country and with a total workforce of 530, it will also be interesting to see how Paga completes its expansion into the Philippines and Mexico later this year.