Three out of 10 payments in Africa fail, according to reports. Factors driving this range from a fragmented payment landscape and invalid cards to inactive accounts and higher dispute rates; they surface every year, resulting in a loss of $14 billion in recurring revenue for digital businesses across the continent.
These issues are set to increase as digital payments in Africa continue to grow, by 20% year-over-year, according to some reports. And while gateways and aggregators have made it easier for businesses to accept multiple payment methods, few solutions exist to aggregate them by necessity and deal with payment failures that occur on each platform. This is where Revio, a South African payment and API collection company, comes in. The fintech that makes it easier for businesses across Africa to connect to multiple payment methods and manage payment failures announces it has raised $1.1m in seed funding.
Fintech investor SpeedInvest led the round, with participation from Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also participated, including payment and revenue collection experts from Sequoia, Quona Capital and Circle Payments, according to a statement shared by the startup.
Revio was founded by Rouan Botha in 2020. As a professional who has worked in the banking and insurance industries in South Africa for more than a decade, Botha decided to launch Revio after seeing the time and manual effort companies spend to bind customers on overdue and failed payments. It was clear that very few companies had invested significantly in revenue recovery. When they asked over 25 customers where they would invest $1 if they had to fix their payment systems, most said they would spend at least 90% of that money dealing with payment failures and customer churn.
“We have debit order as the most important recurring payment method in South Africa. But as businesses want to start adding other different payment methods to meet customer demand, it has been very hard to do that,” Botha told TechCrunch in an interview. “And it’s only because of the disconnect between banks, new fintechs, and payment aggregators that has also made it difficult for businesses to collect ongoing recurring revenue. So with Revio, we wanted to make it really easy for businesses to connect all the payment methods they need, not just in South Africa, but across the rest of Africa and around the world.
Botha is joined by three executives who run the business of the company: Commercial Director Pieter Grobbelaar, former national leader at Flutterwave; chief technology officer Kyle Tituswho has experience working with fintechs and venture capital studio and COO Nicole Dunna business creator and operator who has worked with several African startups.
Dunn, on a call with TechCrunch alongside Botha, said Revio aggregates and orchestrates several different payment methods in Africa, including card, wire transfer, debit order, mobile money, vouchers and the QR code. The platform collects and settles payments in over 40 marketplaces through payment providers such as Flutterwave, Paystack, Ozow, and Stitch. Some of its features, in addition to multiple payment methods, include smart payment routing, automated billing processes, automatic withdrawals, and real-time analytics and reporting.
In more than a year of activity, Revio has integrated more than 50 customers and processes thousands of transactions per month. They range from large enterprises to medium-sized enterprises to fast-growing scale-ups that generate recurring revenue and high transaction volumes, typically requiring multiple payment methods across multiple markets. These are often insurers, telecom operators, retailers, software or subscription media, asset leasing or finance companies and alternative lenders.
“We have also developed an orchestration capability through which we can reduce payment failures through things like smart transaction routing, smart attempts to ensure a customer is not in arrears , especially on recurring payments,” Dunn said. “And where we differ is that we serve businesses with recurring revenue instead of typical e-commerce platforms.” She adds that Revio has more than 100 customers awaiting integration.
Payment orchestration is becoming increasingly important in today’s world where businesses operate in multiple countries and need an array of payment methods to get by. While a handful of such platforms have existed in the US and Europe to handle this heavy lifting through unified payment APIs such as Primer, Spreedly and Zooz, businesses in developing markets are beginning to see identical platforms such as Revio and Egypt-based MoneyHash. stage in various regions.
On the subject of the competition and its particularity, Revio claims that it is the first African payment platform focused on payment failures and revenue recovery. “We also have more functionality and coverage in the context of Sub-Saharan, Sub-Saharan Africa compared to other platforms in the market,” Dunn added. Be that as it may, the global payment orchestration market, according to reports, is growing at a rapid pace (According to a study, the market size is expected to reach $6.52 billion by 2030, growing at a CAGR of 24.5% from 2022 to 2030) and there is more than enough room for new platforms to take market share – and incumbents like Revio to deepen its reach.
This is one of the reasons the two-year-old fintech has raised this capital: to enter new markets inside and outside Africa, grow its team in the process and launch new new products for its growing clientele.
“I would say the investment in use is two-fold,” Botha said. “One is to access more strategic machine learning and data skills to help us grow and drive better engagement with customers, understand why they fail and how to get a better response rate. . With the resulting data, we can begin our experimentation in some of the major markets in Africa. We want to operate in about 13 African countries over the next 18 months, but focusing on three or four major markets. And then get enough traction so we can take on other emerging markets like Latin America.