Zambia start-up receives VC funding
A philanthropic firm, started by eBay founder Pierre Omidyar in 2004, has made a venture capital (VC) investment in a Zambian mobile payments start-up.
San Francisco-based Omidyar Network has injected $3.2 million into Mobile Transactions International, a Zambian company that enables electronic mobile money transfers among the country's “unbanked”.
The deal was done in conjunction with an organisation called ACCION International, which brings financial services to those in emerging countries.
More than 80% of adult income-earning people, among Zambia's population of 13 million, do not have bank accounts, according to Worldwatch. Mobile Transactions has, therefore, brought money transfer services to thousands of people in the country, and chief executive Mike Quinn says his business does up to 50 000 transactions per month, worth $3 million.
The concept of North American or even European start-ups receiving funding is a common practice in those two regions of the world, but the two US investment companies say their VC investment in Mobile Transactions is a first for Zambia.
“We start off with essentially having $3 million in the bank with no debt, which is essentially quite a great starting point for a company,” says Mike Quinn, chief executive of Mobile Transactions International in Zambia.
Kenya started the craze surrounding mobile money transfers in Africa with its M-PESA system, and the trend has spread to other parts of Africa such as Zambia.
“The rise of mobile technology has created appealing new models and drawn talented entrepreneurs,” says Arjuna Costa, director of investments at Omidyar Network.