Adumo, a South African payments solution provider, has landed $15 million (ZAR 225 million) in preferred shares from International Finance Corporation (IFC) – a member of the World Bank Group.
It also secured part of the investment from IFC’s Financial Institutions Growth Fund – a fund managed by IFC’s asset management company
The start-up, which predominantly targets small and medium-sized businesses with payments solutions, will use the fresh funding to offer new payment solutions, as well as “purpose-based” lending services – to both consumers and retailers.
Paul Kent, Adumo’s CEO, says “interest in cashless payment services” is “at an all-time high” due to the pandemic.
It already owns merchant acquirers Sureswipe and Ikhokha, as well as payment processor Innervation Pan African Payments.
Adumo customers include multinational as well as independent retailers, entrepreneurs, and informal traders. Present in 14 African countries, the fintech claims to be South Africa’s largest independent payments processor.
“Digital payments are often the first step for a small business to build a credit history. Which opens the way to access further financial services such as financing to grow the business,” says Sérgio Pimenta, IFC’s vice president for the Middle East and Africa.
Previously known as Crossfin Transactional Solutions, Adumo claims to process more than $5 billion in transactions annually.
To date, the fintech says it’s acquired more than 30,000 active clients. It currently owns some 50,000 active card machines.
Adumo last raised funds in 2018, when UK-based Apis Partners invested via its “Apis Growth Fund I”.
Small enterprises employ between 50% and 60% of South Africa’s work force, according to World Bank data. They also contribute 34% to the country’s GDP.
But as the World Bank also pointed out back in 2018, there’s still huge potential to uncover.
“The small business sector has been relatively stagnant over the last decade,” the bank said. “And only 14% of the country’s small businesses are formalised, capping their job creation and economic contribution potential.”