Three out of 10 payments in Africa fail, according to reports. The factors behind this range from a fragmented payment landscape and invalid cards to inactive accounts and higher dispute rates; arise annually, resulting in a loss of $14 billion in recurring revenue for digital businesses across the continent.
These problems are sure to increase as digital payments in Africa continue to grow, up 20% year-over-year according to some reports. And while gateways and aggregators have made it easier for businesses to accept multiple payment methods, few solutions exist to aggregate them out of necessity and deal with the payment failures that arise from each platform. That’s where Revio, a South African API collection and payment company, comes into play. The fintech that makes it easy for businesses in Africa to connect to multiple payment methods and manage payment failures announces that it has raised $1.1 million in seed funding.
Fintech investor SpeedInvest led the round, with the participation of Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also participated, including payment and revenue recovery experts from Sequoia, Quona Capital and Circle Payments, according to a statement shared by the startup.
Revio was founded by Ruan Botha in 2020. As a professional who has worked in the South African banking and insurance industries for more than a decade, Botha decided to launch Revio after seeing how much time and manual effort companies spend capturing customers with outstanding and failed payments. It was clear that very few companies had invested significantly in revenue recovery. When asked more than 25 customers what they would spend $1 on if they had to fix their payment systems, most said they would spend at least 90% of that money managing payment failures and customer churn.
“We have the debit order as the largest recurring payment method in South Africa. But at the time when companies want to start adding other different payment methods to cope with customer demand, it was very difficult for them to do it,” Botha told TechCrunch in an interview. “And it was just because of the disconnect between banks, fintech startups and payment aggregators, which also made it difficult for businesses to collect recurring revenue on an ongoing basis. So with Revio, we wanted to make it very simple for businesses to connect whatever payment method they need, not just in South Africa, but also in the rest of Africa and around the world.”
Botha is joined by three executives who run the company’s affairs: Commercial Director pieter grobbelaar, a former country leader in Flutterwave; Head of Technology kyle tituswho has experience working with fintechs and a venture study and COO nicole dunna business creator and operator who has worked with multiple African start-ups.
Dunn, on a call with TechCrunch along with Botha, said that Revio aggregates and orchestrates multiple different payment methods in Africa, including cards, bank transfers, debit orders, mobile money, coupons, and QR codes. The platform collects and settles payments in over 40 marketplaces through payment providers such as Flutterwave, Paystack, Ozow, and Stitch. Some of its features, in addition to multiple payment methods, include intelligent payment routing, automated billing processes, automatic withdrawals, and real-time analytics and reporting.
In over a year of operations, Revio has onboarded over 50 clients and processes thousands of transactions monthly. They range from large-scale enterprises to fast-growing mid-market corporations and scale-ups that are involved with high-volume, recurring-revenue businesses, typically requiring multiple payment methods in multiple markets. These are typically insurers, telecommunications companies, retailers, subscription software or media, asset leasing or financing businesses, and alternative lenders.
“We’ve also built an orchestration capability where we can reduce payment failures through things like intelligent transaction routing, intelligent retries to make sure a customer doesn’t fall behind, specifically on recurring payments,” Dunn said. “And then where we differ is that we serve businesses with recurring revenue as opposed to the typical e-commerce platforms.” He adds that Revio has more than 100 clients waiting to be onboarded.
Payment orchestration is becoming increasingly important in today’s world, where businesses operate in multiple countries and need a variety of payment methods to survive. While there have been a handful of such platforms in the US and Europe to handle this heavy lifting via a unified payments API like Primer, Spreedly and Zooz, businesses in developing markets are starting to see Identical platforms like Egypt-based Revio and MoneyHash. stage in various regions.
On the subject of competition and how it stands out, Revio claims that it is the first African payment platform focused on payment failures and revenue recovery. “We also have more functionality and coverage in the sub-Saharan, sub-Saharan African context compared to other platforms on the market,” Dunn added. Regardless, the global payment orchestration market is reportedly growing at a fast pace (according to a study, the market size is expected to reach $6.52 billion by 2030, advancing at a CAGR of 24, 5% from 2022 to 2030) and there is more than enough room for newer platforms to gain market share, and incumbents like Revio to deepen their reach.
It’s one of the reasons the fintech, founded two years ago, raised this capital: entering new markets in and out of Africa, expanding its team in the process, and launching new products for its growing clientele.
“I would say the investment in use is twofold,” Botha said. “One is to gain access to more strategic skills around machine learning and data to help us grow and drive better customer engagement, understand why they fail, and how to get a better response rate. With the data from that, we can start our experimentation in some of the major markets in Africa. We want to operate in about 13 African countries in the next 18 months, but focusing on three or four large markets. And then get enough traction that we can take to other emerging markets like Latin America.”