The payment sector in Africa is still largely fragmented, with various payment players offering different payment options to both customers and businesses. The fragmentation of payment issues leads to payment failures, as these include invalid cards, inactive accounts, and high dispute rates.
Revio, one of the few startups working on payment orchestration to address this fragmentation, is one of the few startups working on payment orchestration to address this fragmentation. Ruaan Botha, the co-founder and CEO, said 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, founded in 2000, helps companies in streamlining their order-to-cash lifecycles while dealing with issues posed by employing various payment options via its APIs. The startup has donated $5.2 million in seed funding to strengthen its efforts in addressing these failed payments that cost digital companies billions in recurring revenue annually.
This is the second round of funding received by Revio in the past 12 months. In November, the VC secured $1.1 million in pre-seed funding from investors, including Speedinvest, Ralicap and Everywhere VC. These investors wrote follow-on checks in the QED-led seed round, along with growth stage pan-African VC Partech.
According to co-founder and chief operating officer Nicole Dunn, the involvement 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.
When a business operates in different countries and accepts diverse payment methods, using payment orchestration platforms becomes more crucial. 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. With its API, these merchants are able to access over 70 payment methods and service providers, providing them with transaction routing, automated failover, and retries, and real-time customer engagement processes to increase payment success rates.
On Wednesday, Revio unveiled a revenue recovery case based on the understanding 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 about 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 says.
To offer businesses that transact across different markets, payment orchestration platforms need broad coverage to provide 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. Revio said last year that its clients included large-scale enterprises to midmarket corporations and fast-growing scale-ups involved with recurring revenue businesses and high transactional volumes. However, due to learnings over the past year, Revio concentrates more on large-scale enterprises with complex payment requirements, the company said in a statement.
These clients include four of Africa's largest insurers and two of the continent's largest telcos.
Revio has seen its revenue increase by 1,000% in the past year, and plans to target worldwide retailers servicing the African market during its next development phase, Dunn said. The startup has started interactions with a few of these merchants to understand better what it would take to service them effectively, mainly as it builds ability around cross-border reconciliation settlement, she said. The company's funding will enhance its technological capabilities in this regard and increase its workforce by attracting talented individuals from all corners of the globe.
The problem has been fully solved. 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 partner at QED Investors.