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Nigerian digital bank Carbon hit $240M in payments processed last year, up 89% from 2019

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In 2018, Carbon, a Nigerian fintech startup, made its financials public for the first time. Although typical for foreign private startups, it’s almost an anomaly in Africa. There have been rare cases in the past, for instance, when Rocket Internet had to include Jumia’s financials in its yearly reports after going public. At the time, the German investment outfit was a founding shareholder in the African-based unicorn.

While Carbon has been hailed for transparency and openness, it remains to be seen if it’s a trend other African startups are willing to follow. Posting audited financials can prove detrimental for a private African company for several reasons ranging from bad marketing and PR if huge losses are incurred to regulatory clampdown if the company performs well.

A $15.8 million VC-backed company, Carbon was founded by Chijioke Dozie and Ngozi Dozie in 2012. The brothers started the company in a niche digital lending market, but now, the company offers a plethora of services from savings to payments and investments.

When Chijioke Dozie, the CEO, spoke to TechCrunch in 2019, he cited recruitment purposes and clientele trust as reasons why the company made its financials public — an exercise it has done every second quarter for two years. It’s a tradition Dozie hopes the company will keep this year.

“Our annual report will be released in the second quarter after our financial audit has been concluded. If you recall, we released a year in review in January 2020 before we released the fiscal year of 2019 report,” he told TechCrunch.

The company’s annual reports reveal numbers on gross earnings, profit/loss before and after-tax, net impairment loss, total assets, liabilities, and equity, among others. The company’s year on review, on the other hand, highlights payments processed, customer base, loans disbursed, and investments made on the platform. 

As we wait for its annual report for 2020, its year in review offers a sneak peek into how Carbon grew the past year.

For the fiscal year 2020, the company which has about 659,000 customers said it processed ₦96.54 billion (~$241.35 million), up 89% compared to the same period a year ago. For its lending arm, disbursement volume was ₦25.21 billion (~$63 million), up 9.1% from FY2019. Also, ₦13.02 billion (~$32.55 million) worth of investments was made on the platform, representing a 365% increase from the previous year.

According to the company, factors that influenced these numbers last year included launching an iOS app for customer acquisition, introducing its USSD banking feature for lower-income customers; and a social chat feature for faster transactions. 

Image Credits: Carbon

Also, in its quest to become a digital bank, Carbon acquired a microfinance bank license. According to Dozie, the license means that Carbon’s customers are afforded additional protection through depositors’ insurance via the NDIC. The Nigerian Deposit Insurance Corporation, a federal insurance agency, protects depositors and guarantees the settlement of insured funds when a financial institution can no longer repay their deposits. With that in place, Dozie says the typical Carbon wallet is now a full-fledged bank account, and customers can perform transactions on the platform as they would with any bank.

Like Carbon, other startups on the continent have followed suit by releasing year-on-year metrics. In recent memory, most of these startups play in the fintech and crypto-exchange space. But Carbon remains unique amongst these crop of companies as it releases both transaction stats and real insights into its financial performance.

Whereas transaction stats tend to highlight a seemingly explosive year-on-year growth of a company, a comprehensive view of financials will likely show a mixed performance. For instance, Carbon generated $17.5 million in revenue for FY2019, up 68% from 2018. For that same period, it recorded a 23% decrease in its profit after tax numbers, a 222% rise in total liabilities and 107% increase in assets finishing the year off with a 6% increase in total equity.

It’ll be interesting to see what these numbers look like for 2020. But that’s not the only event to keep an eye on. In addition to its $10 million Series A from SA-based Net1 UEPS Technologies and a $5million debt financing in 2019 from Lendable, Dozie says the digital bank is ramping efforts to raise a Series B round soon to consolidate the company’s position on the continent.

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InsurGrid raises pre-seed financing to help modernize legacy insurance agents

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Insurance agents spend hours handling paperwork and grabbing client information over the phone. A new seed-stage startup, InsurGrid, has developed a software solution to help ease the process, and make it easier for agents to serve existing clients — and secure new ones.

InsurGrid gives agents a personalized platform to collect information from clients, such as date of birth, driver’s license information and policy declaration. This platform helps agents avoid sitting on long calls or managing back-to-back emails, and instead gives them one spot to understand how all their different clients function. It is starting with property and casualty management.

The startup integrates with 85 insurance carriers, serving as the software layer instead of the provider. Using the InsurGrid platform, insurers can ask clients to upload information and within seconds be registered as a policyholder. This essentially turns into a living Rolodex that insurers can use to access information on the account, and offer quotes on a faster rate.

Image Credits: InsurGrid

There’s a monetary benefit in providing better service. Eden Insurance, a customer of InsurGrid, said that people who submit information through the platform converted at an 82% higher rate than those who don’t. Jeremy Eden, the agency owner of Eden Insurance, said they were able to show consumers that its plan was $300 cheaper than its existing rate.

At the heart of InsurGrid is a bet from the founding team that legacy insurance agents aren’t going anywhere. Co-founder/CEO Chase Beach pointed out that the majority of the $684 billion of annual property and casualty insurance premiums in the United States is distributed by approximately 800,000 agents working in 16,000 brokerages. So far, InsurGrid works with more than 150 of those agencies.

When asked if InsurGrid ever had plans to offer its own insurance, similar to insurtech giants Hippo, Lemonade and Root, Beach said that it is solely working on innovating around the sales process for now. He said that these big companies, which have either recently gone public or are planning to, still rely on agents to be successful.

“Instead of us replacing the insurance agent, what if we gave them that same level of technology of a Hippo or large carrier,” Beach said. “And provide them with the digital experiences so they can compete in 2021.”

As time goes on, he sees insurance agents taking the same role that financial advisors or real estate agents take: “very much involved in the process because they are that expert.”

Other startups that have popped up in this space include Gabi, Trellis and Canopy Connect. The differentiator, the team sees, is that Beach comes from a 144-year-old insurance legacy, giving him key insights on how to sell to agents in a successful and effective way. It is starting with sales, but expect InsurGrid to expand to other parts of the insurance process as well.

To help them compete with new and old startups, InsurGrid recently raised $1.3 million in pre-seed financing to help it fulfill its goal to be the “underdog for the underdogs,” Beach said. Investors include Engineering Capital, Hustle Fund, Vess Capital, Sahil Lavingia and Trevor Kienzle.

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Backed by Blossom, Creandum and Index, grocery delivery and dark store startup Dija launches in London

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Dija, the London-based grocery delivery startup, is officially launching today and confirming that it raised £20 million in seed funding in December — a round that we first reported was partially closed the previous month.

Backing the company is Blossom Capital, Creandum and Index Ventures, with Dija seemingly able to raise pre-launch. In fact, there are already rumours swirling around London’s venture capital community that the upstart may be out raising again already — a figure up to £100 million was mooted by one source — as the race to become the early European leader in the burgeoning “dark” grocery store space heats up.

Image Credits: Dija

Over the last few months, a host of European startups have launched with the promise of delivering grocery and other convenience store items within 10-15 minutes of ordering. They do this by building out their own hyper-local, delivery-only fulfilment centres — so-called “dark stores” — and recruiting their own delivery personnel. This full-stack or vertical approach and the visibility it provides is then supposed to produce enough supply chain and logistics efficiency to make the unit economics work, although that part is far from proven.

Earlier this week, Berlin-based Flink announced that it had raised $52 million in seed financing in a mixture of equity and debt. The company didn’t break out the equity-debt split, though one source told me the equity component was roughly half and half.

Others in the space include Berlin’s Gorillas, London’s Jiffy and Weezy, and France’s Cajoo, all of which also claim to focus on fresh food and groceries. There’s also the likes of Zapp, which is still in stealth and more focused on a potentially higher-margin convenience store offering similar to U.S. unicorn goPuff. Related: goPuff itself is also looking to expand into Europe and is currently in talks to acquire or invest in the U.K.’s Fancy, which some have dubbed a mini goPuff.

However, let’s get back to Dija. Founded by Alberto Menolascina and Yusuf Saban, who both spent a number of years at Deliveroo in senior positions, the company has opened up shop in central London and promises to let you order groceries and other convenience products within 10 minutes. It has hubs in South Kensington, Fulham and Hackney, and says it plans to open 20 further hubs, covering central London and Zone 2, by the summer. Each hub carries around 2,000 products, claiming to be sold at “recommended retail prices”. A flat delivery fee of £1.99 is charged per order.

“The only competitors that we are focused on are the large supermarket chains who dominate a global $12 trillion industry,” Dija’s Menolascina tells me when I ask about competitors. “What really sets us apart from them, besides our speed and technology, is our team, who all have a background in growing and disrupting this industry, including myself and Yusuf, who built and scaled Deliveroo from the ground up”.

Menolascina was previously director of Corporate Strategy and Development at the takeout delivery behemoth and held several positions before that. He also co-founded Everli (formerly Supermercato24), the Instacart-styled grocery delivery company in Italy, and also worked at Just Eat. Saban is the former chief of staff to CEO at Deliveroo and also worked at investment bank Morgan Stanley.

During Dija’s soft-launch, Menolascina says that typical customers have been doing their weekly food shop using the app, and also fulfilling other needs, such as last minute emergencies or late night cravings. “The pain points Dija is helping to solve are universal and we built Dija to be accessible to everyone,” he says. “It’s why we offer products at retail prices, available in 10 minutes – combining value and convenience. Already, Dija is becoming a key service for parents who are pressed for time working from home and homeschooling, as one example”.

Despite the millions of dollars being pumped into the space, a number of VCs I’ve spoken to privately are sceptical that fresh groceries with near instant delivery can be made to work. The thinking is that fresh food perishes, margins are lower, and basket sizes won’t be large enough to cover the costs of delivery.

“This might be the case for other companies, but almost everyone at Dija comes from this industry and knows exactly what they are doing, from buying and merchandising to data and marketing,” Menolascina says, pushing back. “It’s also worth pointing out that we are a full-stack model, so we’re not sharing our margin with other parties. In terms of the average basket size, it varies depending on the customer’s need. On one hand, we have customers who do their entire grocery shop through Dija, while on the other hand, our customers depend on us for emergency purchases e.g. nappies, batteries etc.”

On pricing, he says that, like any retail business, Dija buys products at wholesale prices and sells them at recommended retail prices. “Going forward, we have a clear roadmap on how we generate additional revenue, including strategic partnerships, supply chain optimisation and technology enhancements,” adds Menolascina.

Dija testing on Deliveroo

Image Credits: TechCrunch

Meanwhile, TechCrunch has learned that prior to launching its own app, Dija ran a number of experiments on takeout marketplace Deliveroo, including selling various convenience store items, such as potato chips and over-the-counter pharmaceuticals. If you’ve ever ordered toiletry products from “Baby & Me Pharmacy” or purchased chocolate sweets from “Valentine’s Vows,” you have likely and unknowingly shopped at Dija. Those brands, and a number of others, all delivered from the same address in South Kensington.

“Going direct to consumer without properly testing pick & pack is a big risk,” Menolascina told me in a WhatsApp message a few weeks ago, confirming the Deliveroo tests. “We created disposable virtual brands purely to learn what to sell and how to replenish, pick & pack, and deliver”.

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Daily Crunch: Square acquires Tidal

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Square buys a majority stake in Jay-Z’s Tidal, WhatsApp improves its desktop app and Hopin raises even more funding. This is your Daily Crunch for March 4, 2021.

The big story: Square acquires Tidal

Square announced this morning that it has purchased a majority stake in Tidal, the music streaming service founded by Jay-Z. It sounds like an odd fit at first, which Square CEO Jack Dorsey acknowledged in a tweet asking, “Why would a music streaming company and a financial services company join forces?!”

His answer: “It comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.”

Square is paying $297 million in cash and stock for the deal, which will result in Jay-Z joining Square’s board.

The tech giants

WhatsApp adds voice and video calling to desktop app — This should provide relief to countless people sitting in front of computers who have had to reach for their phone every time WhatsApp rang.

Apple’s App Store is now also under antitrust scrutiny in the UK — The U.K.’s Competition and Markets Authority announced that it’s opened an investigation following a number of complaints from developers alleging unfair terms.

Google speeds up its release cycle for Chrome — Mozilla also moved to a four-week cycle for Firefox last year.

Startups, funding and venture capital

Hopin confirms $400M raise at $5.65B valuation — For Hopin, the round is another rapid-fire funding event.

Coursera is planning to file to go public tomorrow — The company has been talking to underwriters since last year, but tomorrow could mark its first legal step in the process to IPO.

Luxury air travel startup Aero raises $20M — The startup describes its offering as “semi-private” air travel.

Advice and analysis from Extra Crunch

As activist investors loom, what’s next for Box? — A company with plenty of potential is mired in slowing growth.

Unraveling ThredUp’s IPO filing: Slow growth, but a shifting business model — ThredUp is a used-goods marketplace approaching the public markets in the wake of Poshmark’s own strong debut.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

SITA says its airline passenger system was hit by a data breach — Global air transport data giant SITA has confirmed a data breach involving passenger data.

How to successfully dance the creator-brand tango — What makes creators succeed, and how should brands work with them?

Announcing the Early Stage Pitch-Off Judges — On April 2, TechCrunch will feature 10 top startups across the globe at the Early Stage Pitch Off.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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