NOMBA

FINTECH

AFRICA

P.50

NOMBA

FINTECH AFRICA CEO: Yinka Adewale

COMPANY: Nomba

SECTOR:

Fintech

COUNTRY: Nigeria

WEBSITE:

www.nomba.com

NOMBA

YINKA ADEWALE, THE CO-FOUNDER AND CEO OF NOMBA, ON STARTING AND GROWING A FINTECH BUSINESS IN NIGERIA

Yinka Adewale, the cofounder and CEO at Nomba, the Lagos-based leading fintech player in Nigeria has a mission: to improve financial inclusion in the country, and in extension, Africa to reduce the gap of the financially excluded in the region, where according to the World Bank, only 20% of the population has a bank account compared to 92 percent in advanced economies.

Having lived and studied in Nigeria his whole life, Yinka represents a rare breed of fintech founders who are totally home-grown. Prior to going for his Bachelor's Degree in Mechanical Engineering, he had already spent several years writing computer software and at the age of 11, he had started building computer programs. “Building computer software has always been a passion for me because it allows me to do and process things faster,” says Yinka.

“While at the university, I spent some time working with some of the big software companies like Google and Microsoft to help build the developer community on campus and in my 4th year in school, I took an internship in a financial service company in Nigeria, and this where I saw how payment processing worked for the first time. I saw how it could be automated and how it could solve reconciliation problems for businesses,” adds Yinka.

At the time, the company was doing a lot of B2B payments for large enterprises in the business sector and Yinka’s role wasn't one of a software engineer but an entrepreneurial resident, which was much broader. He was coding at night, doing sales at daytime and working on financial models in the afternoon. This proved quite helpful for him in his career.

When he went back to school in his final year, Yinka decided to start his own payments company. “I launched a pet project with a few friends in 2014 where we were issuing NFC cards to students and a mobile phone to merchants to accept payments. This was before point-of-sale (POS) terminals became mainstream in Nigeria. We had about 30,000 customers, 500 merchants and I enjoyed doing that for about three years and then I left.”

SETTING ITSELF APART FROM THE REST

“We have been here for five years so we are not new players. In the last five years, we have been focusing on building technology and serving our customers. To date, we have processed US$6 billion annualized in payment volume. This indeed is a significant number, especially in emerging markets because while many of the players in the fintech space also process this same range of transactions, what sets Nomba apart is our approach to the markets we are in.”

“Our main focus is offline-first payments, where we are equipping retailers with our POS technology to enable them accept in-store payments. Today, retail payments in Nigeria totals about US$81 billion but only a small fraction of that is actually digitized.”

“We started first on the offline strategy where we were basically deploying our POS technology but evolved over the years to an omni-channel payment platform for merchants where whether the merchant wants to accept payment offline or online, Nomba is the go-to place to make that process seamless. This opens them up to all forms of payment channels: they can accept cards, bank transfers, cash payments, and even QR.”

Nomba provides its users with a platform that

By Elly Akoko

NOMBA MANAGEMENT TEAM essentially allows them to manage their financial operations, and to have visibility of their income and expenses. A one-stop shop for financial services for small or medium sized businesses, he reiterates.

Our main focus is offline-first payments, where we are equipping retailers with our POS technology to enable them accept in-store payments.

FUNDRAISING IS KEY BUT NOT EVERYTHING

According to Yinka, to successfully grow a business people, capital and products are three key pillars, especially in the fintech space. “We have seen a lot of capital coming to the market. Over US$3 billion in venture capital came into Africa in 2021 - it's really fast growing. For us, over the years we have raised some initial funding. We got into the Y-Combinator batch of 2017 and raised a seed round of US$1 million, led by Khosla Ventures. We also raised US$5 million Series A funding in 2019,” says Yinka.

“However, for us, it’s not just about raising so much venture capital since we are here to build a sustainable business. Don't get me wrong, having some amount of venture capital in the bank definitely helps to accelerate things, but being able to build a business that has the right unit economics is what allows you to grow.”

“So while we do have an appetite for investors, we think that at the end of the day, the best place to actually get funding from is your customers. By providing value to our own users, we are able to generate enough cash flow to grow our business and this has been our differentiating approach to building our fintech in Nigeria,” he explains.

Our team is the driving force behind our growth

After a public rebrand effort where the company changed its name from Kudi to Nomba as well as announced a new lines of business, the CEO is super excited about the future of the company and believes that its people will make all the difference.

“Right now we're building one of the best teams in Africa to solve and grow payment systems. This is something we do quite well. I can honestly say that it is the hard work and creativity of the team we have had over the last five years that has brought us here. I think the next couple of years will be a lot more interesting and we will move faster as a business.”

“One of the things that we are trying to do is find talented individuals, especially at the executive level first, that are able to help us actualize our dreams.”

OPPORTUNITIES FOR ACQUISITIONS AND GROWTH

According to the CEO, Nomba is always looking for growth opportunities, but one of the biggest barriers to moving into some new markets as a fintech is regulation: regulatory frameworks differ across climes and rightfully so. “One of the best ways to overcome this and expand into new markets is to make acquisitions. This way you get a team that is local and the best of both worlds. Our approach to international expansion is finding markets where we can do this ourselves, but also finding teams that can be instrumental to driving our business. We definitely have an appetite for businesses that we can partner with or that we can acquire in other markets, allowing us to grow into that space.”

Yinka believes that growth is the real driver of sustainability. As long as a business can keep finding growth opportunities, it is going to keep the going, and that itself is probably the most exciting thing for an entrepreneur, he believes. He thinks that many markets also have very smart and talented individuals in the sense of what they have built and they might definitely find some of those in some countries they are looking to go into.

“Our dream is to be able to put our technology in the hands of over 5 million businesses across the continent. By the end of 2022, we would be at around 350,000 business on the platforms. So obviously there's still a lot of work that we need to do.”

HEADWINDS STAND IN THE WAY BUT BANKS HELP

“Over the years, there's been a lot of progress from the regulators to enable digital players like us to get licenses and in scenarios where it takes a while to get those licenses, the banks have very

strong appetites for partnerships. This is one of the things that has helped the Nigerian fintech ecosystem grow. A lot of fintechs are actually built on the partnership with commercial banks.”

“The biggest problem that I have seen in this market is finding great talent. Even in new markets we want to expand to, finding those people and retaining them, especially in a global world where you can work remotely, is becoming a serious challenge”.

The CEO believes that it is important for any business to incorporate sustainable practices across its operations. And because Nomba is in the merchant payment space today, most payments are driven by point of sales devices so a lot of paper is used in processing those transactions.

“There's a device we are launching for our merchants called Nomba Pro which issues electronic receipts to end users. It will benefit the merchants because they get to build a database of customers that allow them to track who’s coming to their business, and help improve their business processes. That's one of the projects I'm really passionate about because it solves sustainability problems from the paper standpoint, but it also helps the merchants keep track of returning footfall to their businesses.”

He adds that one of the company’s other sustainability initiatives involve inspiring the next generation of software engineers, to ensure that the region has its fair share of engineers that will be required to deepen financial inclusion in the continent.

AMBITIOUS GOALS, GREAT IMPACT

Yinka reveals that when he set out to start Nomba, his big dream was to process US$1 billion in annual transaction volumes – a figure that has since been passed many times over. “Right now, we are at over US$6 billion transaction volumes a year. This has happened because of the people that we have as well as our products and customers. This is one of the very interesting milestones that we celebrate as a business.”

“The other one is the executive hires that we are bringing on board as well. We have got our business to the point where many leaders in the industry are looking at us as one of the best places to work. They are also seeing an opportunity to actually take this further a lot faster than myself and my co-founder have done over the last couple of years.”

He believes that as the business grows, his and the co-founder will be laser focused on some key areas of the business as they let others take the lead in others. Meanwhile, the service being offered by his firm will enable business owners to focus on what their businesses are all about, instead of seeking to do everything themselves. “As business owners, we want you to focus on your business operations. If you are a restaurateur for example, we want to give you room to focus on giving your customers the best experience. A seamless payment experience is a key feature here but what about your whole financial operations? We can support all of that.”

“We have mobile applications on a web dashboard that allows you to sign up in 5 minutes and get a digital account, which serves as a fullfledged bank account. This means that you can get paid and you can pay anyone without a bank account. The other thing is that we then offer you a point of sale terminal that allows you to accept cards, bank transfers and even cash payments. You can record all forms of payments that come into your business.”

“Nomba also helps in managing many of the risks and fraud challenges that small businesses face when it comes to digital payments. We take all financial operations away from you such that you don't have to focus on hiring a lot of people to help you manage your money. We want to be the platform that essentially helps you manage all of your income and expenses by providing a simple technology for you in 5 minutes that allows you to set up digital payments as a small business.”

Yinka believes that the automation of business operations is the future of African businesses, and that facilitating payments is at the core of this transformation across the Continent. “With these new tools, the actual work doesn't necessarily have to be done in front of the desk in an office building. I think that's one of the lessons that I have learned as a business owner.” IN NUMBERS

US$ 6B

TRANSACTION VOLUMES A YEAR