South African fintech investment platform Crossfin Ventures has announced an investment in South African fintech firm DigiSquad for an undisclosed sum.
DigiSquad is a payments advisory and platform solutions company that aims to grow the reach of modern payment platforms in under-serviced communities across the African continent.
From its base in Johannesburg, the company provides advisory and consulting, product design, and data and analytics services to clients throughout Africa and beyond, including the US, says Crossfin in a statement.
DigiSquad CEO and founder Bishnen Kumalo says: “Africa’s payments sector is rife with innovation, but many of the products and services that are being designed by and for underserved communities fail to recognise the existing ecosystems and innovative approaches that are already present in these communities.
“We know these communities are rich with solutions – we are simply trying to enable these solutions through the digital products we develop. As a proudly African, proudly black woman-owned fintech, we are excited to play our part in redefining the face of digital innovation and to help drive financial inclusion across the continent.”
Anton Gaylard, co-founder and CXO at Crossfin, says: “As a proudly South African investment platform, we are proud to support Bishnen and her team, with some of our team having already worked with them in previous roles.
“We were attracted to their cloud-based payments platform that holds great relevance across our portfolio and has already enjoyed the endorsement of Eskom. We look forward to leveraging their expertise across our portfolio and supporting them as they build out an exciting payments business.”
Kumalo, who previously worked in an executive capacity at BankservAfrica and was a director for the Rapid Payments Programme, provided the initial spark that led to the formation of DigiSquad, the statement adds.
Partner Lundi Kumalo, who manages the operations of the business, and Keitumetse Koboekae, who heads up product development, joined shortly after to form the “Squad”.
“Having worked in teams during my time in corporate and experiencing the power of collaboration first hand, I was determined from the outset not to do this alone,” says Bishnen Kumalo. “Shortly after founding DigiSquad, I convinced Lundi and Keitu to join me as equal shareholders in the business.”
According to Crossfin, the collective experience and expertise within the squad has enabled the company to compete on an even footing with larger, more established companies.
It notes that the team drew on the technical capabilities developed while working at large banks and financial institutions to develop their own payments platform, called DigiEngine.
“We knew our technical capabilities were enough of a point of differentiation to make us competitive,” says Koboekae. “We bootstrapped the build and developed DigiEngine over an 18-month period. Recently, we were awarded a contract by Eskom to become one of its five national vending agents, beating out far larger competitors in the process.”
Lundi Kumalo adds: “DigiSquad has had to endure the pressures inherent in starting up a company balancing immediate client needs and future strategy. By taking a two-pronged approach, we were able to build a strong advisory practice, while undergoing the technical build. Getting that balance right was tricky, and we experienced several challenges along the way, but we kept on going, sometimes on just a wing and a prayer.”
The company says it now wants to scale its activities and expand its sphere of influence to a broader cross-section of the African payments and fintech landscape, which prompted its search for venture funding.
However, Bishnen Kumalo says most venture capital firms don’t look at the types of organisations that DigiSquad is seeking to support.
“I encountered Crossfin while working in corporate and liked their focus on building synergies between the companies in which they invest. While we may be a start-up, we are all highly experienced and qualified, with established networks and a strong reputation within the formal financial services sector.
“Crossfin understood this better than most and can integrate our expertise and technologies with the other companies − large and small − within its portfolio. We believe this will accelerate our growth and enable us to rapidly expand our reach and impact.”
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