Six months after announcing a plan to explore opportunities in Africa, QED Investors has made its first portfolio investment in the continent. Last week, the Alexandria, Va.-based venture capital firm joined a funding round for TeamApt, which operates a business payments platform in Nigeria.
The two companies did not disclose the size of the funding, but TechCrunch, citing unidentified sources, termed it a pre-Series C round worth over $50 million.
With more than 400,000 business customers, TeamAptis Nigeria’s largest business payments and banking platform. At its current run rate, the seven-year-old startup is on track to process over $100 billion annually.
“I am proud to bring Africa to QED and QED to Africa,” said QED Investors partner Gbenga Ajayi, who leads the venture firm’s African business. “When you combine Nigeria’s lack of ATM penetration [9 per 100,000 people], with a secondary issue of a general lack of card acceptance, the opportunities for digital disruption are plentiful,” he added.
TeamApt CEO Tosin Eniolorunda hailed QED’s deep domain prowess. “As core fintech operators, QED is bringing the fintech expertise we need to scale in Nigeria, and as we plan to expand our offering across Africa,” said Eniolorunda.
Unicorn-rich Portfolio
QED Investors was founded in 2007 by Nigel Morris and Frank Rotman. The two worked together at McLean, Va.-based Capital One Financial Services, a major card issuer and banker. Morris was a co founder of Capital One, and served as president and chief operating officer. Rotman was among Capital One’s earliest analysts and spent 13 years at the firm.
Earlier this year, both Rotman and Morris and were named to Forbes’ annual Midas List. Rotman was ranked No. 45 on the list, and has featured in it for five consecutive years. Morris came in at No. 54 on his second appearance in the list.
Rotman’s biggest hit at QED has been Credit Karma, which was acquired by Intuit for $7.1 billion in December 2020. His portfolio includes more than 20 investments, including SoFi, Roofstock, Flywire and Provide.Morris’ biggest success has been Brazilian neo bank Nubank, which was valued at $41 billion when it went public in December 2021. He has board seats in portfolio companies Amount, Avid Xchange, Bitso, ClearScore, Mission Lane, Quinto Andar and Remitly.
The venture firm focused on fin tech startups has invested $4.6 billion in 14 countries. Today, it operates five funds with assets under management of over $1.4 billion. QED’s most recent fund, worth$1.1 billion, was raised in September 2021. Of the fund, $550 million has been earmarked for early-stage investments and $500 million for a new growth fund. In 2020, it raised a $350 million fund.
Overall, the firm has made over 250 portfolio investments, and more than 30 exits, including Remitly. Of its portfolio companies, about 25 are unicorns. Its most recent portfolio investments include Meow, Shop Circle, Solfácil, Superjoi, Zubale, Financepeer and Morado.
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Nevins & Associates
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Foxtrot Media
Paradoxical Nigerian Market
TeamApt aims to digitize Nigeria’s economy, and eyes opportunities in other countries. It has developed two products, called Moniepoint and Monnify, that help 41 million small- and medium-sized businesses not only enable digital payments, but also provide access to working capital and accounting tools.
The Nigerian market is somewhat of a paradox. Even though its ATM penetration is low, the country still thrives on cash. As much as 80% of transactions are in cash. Similarly, it has high penetration of debit cards, but usage remains low. Regardless, Nigeria’s progress in digital payments has been remarkable. Data on the first four months of 2022 suggests an annual run-rate of over $800 billion for digital transactions. Of the amount, TeamApth as a share of over 12%.
