PalmPay, a fintech African digital bank, is in discussions to raise between $50 million and $100 million in a Series B round, according to sources familiar with the situation.
While it’s not clear what valuation they are aiming for, their 2021 round positioned them as one of the most valuable startups on the continent, almost reaching unicorn status.
PalmPay declined to comment on the specifics of the fundraising but a spokesperson mentioned that the 6-year-old fintech is in a solid financial position and is exploring growth opportunities.
Having raised close to $140 million from seed and Series A rounds, the company is now profitable, as per individuals familiar with its financials.
The new funding, expected to consist of both equity and debt, will drive PalmPay’s expansion: strengthening its presence in Nigeria, expanding its newer business-focused offerings, and launching these products in new markets across Africa and Asia.
Last month, PalmPay announced reaching 15 million daily transactions, fueled by their 35 million registered users. These transactions now amount to “tens of billions of dollars” annually in value, according to the company.
Revenue has also seen a substantial increase. PalmPay’s revenue was $64 million in 2023, as reported by the Financial Times, and has more than doubled since then, according to insiders familiar with the company’s financials.
Founded in 2019 in Nigeria, PalmPay began in Africa’s most populous country and a key fintech center. Back then, over half of Nigerian adults were unbanked, with traditional banks mostly serving salaried or formal-sector clients, often with requirements that excluded mass-market users.
PalmPay saw an opportunity to change that dynamic: by building a digital bank from the ground up, optimized for the realities of Africa’s informal economy. The company launched an app with instant onboarding, no transfer fees, and an expanding range of services, including credit, savings, insurance, and bill payments, all designed for the needs of underbanked consumers and small businesses.
Key to PalmPay’s distribution and marketing strength is its collaboration with Transsion, the Chinese phone maker dominating smartphone sales in Africa. Through this partnership, PalmPay installs its app on selected financed smartphones, helping boost user acquisition and engagement.
Now one of the most widely used fintech apps in Nigeria, PalmPay is gearing up to replicate its model in new markets overseas. The neobanking platform has expanded to Tanzania and Bangladesh and plans to launch device financing in Nigeria.
GIC (Singapore’s sovereign wealth fund) and MediaTek, one of the world’s biggest mobile chipset makers, are among PalmPay’s other investors.
On the business side, PalmPay offers cross-border payments for merchants who want to send and receive payments across Africa via a single API, a recurring pain point. This newly launched business feature, currently active in Nigeria, Kenya, and Tanzania, processes “hundreds of millions of dollars monthly,” the company has confirmed.
