The payment landscape in Africa is still fragmented, with multiple payment providers offering different payment options to both customers and businesses. This fragmentation leads to payment failures, which are inevitable due to factors such as invalid cards, inactive accounts, and high dispute rates.
Revio, an emerging startup in South Africa, is one of the few startups working on payment orchestration to address this fragmentation. The co-founder and CEO, Ruaan Botha, told TechCrunch that he started the Fintech after learning how much time and manual effort businesses spend collecting payments across various providers and engaging customers on outstanding and failed payments.
The startup's two-year-old startup helps companies streamline their cash-to-cash cycle while addressing issues caused by employing various payment options via its APIs. The startup raised $5.2 million in seed funding to strengthen its efforts in addressing these failing payments that cost digital businesses billions in recurring revenue annually.
The second round of funding has been received by Revio in the past 12 months. In November, the company secured $1.1 million in pre-seed funding from investors, including Speedinvest, Ralicap and Everywhere VC. The investors wrote follow-on checks in the QED-led seed round, joined by growth-stage pan-African VC Partech.
According to Co-Founder and Chief Operating Officer Nicole Dunn, the participation of QED and Partech in Revio's seed round is a testament to the importance of its product.
Orchestration reduces the cost, risk, and complexity of payments.
In case a business operates in multiple countries and accepts different payment methods, payment orchestration platforms become increasingly essential. Just as Primer, Spreedly, and Zooz, via their APIs, handle this heavy lifting in the U.S. and Europe, Revio and similar upstarts, including Egypt-based MoneyHash, do the same for Africa.
Dunn said that Revio has created an order-to-cash lifecycle, or end-to-end payment value chain, that merchants can use to collect revenue from their customers. Through its API, these merchants connect to more than 70 payment methods and service providers, enabling them to access transaction routing, automated failover, and retries, and real-time customer engagement processes, to boost payment success rates.
In addition, Revio recently unveiled a revenue recovery case for Africa due to the recognition that payment failure in Africa isn't always due to technical difficulties, it may also be the result of insufficient funds or an abandoned authorization. It's really around bridging the merchants' need to connect with the consumer reality on the ground. And that's been quite different in the broader market context, he said.
The scope of payment orchestration platforms must be broad enough to serve businesses that transact across various markets to obtain enough value for them. Fintech, based in Cape Town, says it has made strides in that regard, expanding its scope to encompass over 25 African markets.
Even though Revio has around 50 customers, less than half of them - enterprise and mid-market customers - are mostly responsible for this growth in coverage. Last year, Revio identified its clients as large-scale enterprises, mid-market corporations, and fast-growing scale-ups involved with recurring revenue businesses and high transactional volumes. Due to learnings over the past year, Revio is more focused on large-scale enterprises with complex payment requirements.
These clients include four of Africa's largest insurers and two of the continent's largest telcos.
Revio, which has seen revenue increase 1,000% in the past year, also plans to target global retailers servicing the African market during its next development phase, Dunn said. She said the startup has begun interactions with a few of these merchants to understand better what it would take to service them effectively, mainly as it builds capabilities around cross-border reconciliation settlements. The new funding will enhance the company's technological capabilities and broaden its staff, by attracting skilled workers from both inside and outside the continent.
''Teaching is a complete solution. '' Revio is building a platform that can unlock increased e-commerce and digital payment activity on the continent and help global and local merchants reach new customer segments, said Gbenga Ajayi, partner and Africa lead at QED Investors.