VENTURES: Fundamo Boosts 'Silicon Cape' Tag
Recent Western Cape Business News
THE Western Cape’s reputation as a hub for technology development and innovation – a ‘Silicon Cape’, if you will – was greatly enhanced last month with the purchase by financials services giant Visa of Cape Town-based Fundamo for $110 million (roughly R700 million).
Fundamo is a locally developed platform provider of mobile banking services for mobile network operators and financial institutions in developing economies.
Fundamo, an unlisted company, has kept a low profile since inception in 2000 – although the business did have some high profile anchor investors like Sanlam, Remgro and Mark Shuttleworth’s HBD Venture Capital.
Remgro, which (via its old Venfin structure) has backed a number of locally developed technologies, cashes out a nifty R230 million from the Visa deal. CBN reckons Remgro, which held around 30% of Fundamo, probably invested less than R50 million in the venture over the years.
Fundamo is clearly set to play an integral role in Visa’s push into developing economies.
Visa points out that while mobile financial services in developing markets are growing, these services are often limited in scalability and are not interoperable with other regional payment services or global payment networks.
Fundamo’s platform, though, enables delivery of mobile financial services to unbanked and under-banked consumers - including person-to-person payment, airtime top-up, bill payment and branchless banking services.
Visa CEO Joseph Saunders says Visa believes the combined Visa Fundamo platform will add enhanced functionality and new services to existing mobile financial services subscribers across Africa, Asia and Latin America.
“This has the potential to connect billions of unbanked and under-banked consumers to each other and to the global economy.”
Visa is also backing Fundamo’s Cape-based team. Visa confirmed that CEO Hannes van Rensburg and the current Fundamo management team will continue to manage the venture.
Prior to the Visa deal Fundamo had more than 50 active mobile financial services deployments across more than 40 countries (27 in Africa, Asia and the Middle East) with a client base of more than five million registered subscribers.
While no financial statements are available for Fundamo, the company’s website points to a “excellent business results” that generate profitably with strong revenue and capacity growth.
The website claims Fundamo invested 35% of its annual revenues in research and development –something that was definitely worth the effort in light of Visa’s advance.
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