Zoona, one of the leading money transfer service providers in Zambia and Malawi, raised $15 million in its second round of capital funding as it seeks to spread its operations to ten countries across Africa by 2020.
International Finance Corporation (IFC), a member of the World Bank Group, led the investment with $7.5 million while Omidyar Network doubled its investment in the second phase.
Other investors include Accion, Patrick Pichette (former CFO at Google), Quona Capital, 4DI Capital of South Africa and Lundin Investment.
Pichette is an advisor to the startup while Justin Stanford, co-founder and managing director at 4DI Capital holds a non-executive position on Zoona’s board.
The startup currently has over 1.5 million subscribers and intends to grow its market base to over 30 million customers.
The expansion plans are currently focused on Tanzanian, Mozambique, Democratic Republic of Congo markets, avoiding markets dominated by Vodafone’s M-Pesa and western Union.
“We are less interested in cross-border transactions. We are more likely to partner with a Western Union to distribute remittances on their behalf,” Moneyweb quoted Mike Quinn, Zoona Chief Executive Officer saying.
MEDA did not take part in the capital investment because it does not finance organizations seeking to scale up their operations, CNBC Africa reported.
During the first capital investment in 2012, Zoona raised $4 million.
Since it started operations in 2009, Zoona has processed over $1 billion in transactions. Majority of the transactions are from school fees payments, medical emergencies and small business deals, Ventureburn reported.
The startup charges between two to eight percent for every transaction but does not charge recipients for a cash-out, unlike M-Pesa that charges about $0.01 for the least withdrawal amount of $1.
Zoona has created at least 2,500 jobs with over 1000 entrepreneurs operating more than 1,500 outlets in Zambia and Malawi.
The startup’s business model targets young women. At least 75 percent of the outlets are owned by women, Ventureburn reported.