Image credits: Révio
In Africa, three in ten payments fail, according to reports. The factors driving this range from a fragmented payment landscape and invalid cards to dormant accounts and higher dispute rates; they surface every year, resulting in a loss of $14 billion in recurring revenue for digital businesses across the continent.
These problems are set to worsen as digital payments in Africa continue to grow, by 20% per year, according to some reports. Although gateways and aggregators have made it easier for businesses to accept multiple payment methods, there are few solutions for consolidating them out of necessity and handling payment failures that occur on each platform. It’s there that Révioa South African API payments and collections company, comes in. The fintech, which makes it easier for businesses across Africa to connect to multiple payment methods and manage failed payments, announces it has raised $1.1 million in seed funding.
Fintech investor Speedinvest led the round, with participation from Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also participated, including payments and revenue recovery experts from Sequoia, Quona Capital and Circle Payments, according to a statement shared by the startup.
Revio was founded by Ruaan Botha in 2020. As a professional having worked in the banking and insurance sectors in South Africa for over a decade, Botha decided to launch Revio after seeing how much time and manual effort companies spend interacting with customers on unpaid and failed payments. It was clear that very few companies had invested significantly in revenue recovery. When more than 25 customers were asked where they would invest $1 if they needed to fix their payment system, most of them said they would spend at least 90% of that money on handling payment failures. payment and customer churn.
“We consider debit order to be the most important recurring payment method in South Africa. But as companies want to start adding other payment methods to meet customer demand, it’s been very difficult for them to do so,” Botha told TechCrunch in an interview. “And that was simply because of the disconnect between banks, new fintechs and payment aggregators, which also made it difficult for companies to collect recurring revenue on an ongoing basis. So, with Revio, we wanted to make it very simple for businesses to connect all the payment methods they need, not only in South Africa but in the rest of Africa and globally as well.
Botha is accompanied by three managers who manage the affairs of the company: Commercial Director Pieter Grobbelaar, a former country manager at Flutterwave; director of technology Kyle Titus, who has experience working with fintechs and a venture capital studio; Product manager Stefan Grieselwho has over eight years of experience in fintech products; and chief operating officer Nicole Dunna venture capital founder and operator who has worked with several African startups.
Dunn, on a call with TechCrunch alongside Botha, said Revio aggregates and orchestrates several different payment methods in Africa, including card, bank transfer, debit order, mobile money, vouchers purchase order and QR code. The platform collects and settles payments in over 40 markets through payment providers like Flutter Wave, Payroll stack, Ozow And Point. 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 activity, Revio has onboarded over 50 clients and processes thousands of transactions each month. They range from large enterprises to mid-sized businesses to fast-growing scale-ups involved in businesses with recurring revenue and high transaction volumes, typically requiring multiple payment methods across multiple markets. These often include insurers, telecommunications companies, retailers, subscription software or media, leasing or asset finance companies and alternative lenders.
“We have also developed an orchestration capability that allows us to reduce payment failures through things like intelligent transaction routing and intelligent retries to ensure a customer is not in arrears, especially on recurring payments,” Dunn said. “And then where we differentiate ourselves is that we serve businesses with recurring revenue instead of traditional e-commerce platforms.” She 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 wide range of payment methods to survive. While there are a handful of such platforms in the US and Europe to handle this heavy lifting through unified payment APIs like Primer, Quickly And ZoozCompanies in developing markets are starting to see identical platforms such as Egypt-based Revio. MoneyHash occupy a central place in various regions.
When it comes to competition and differentiation, Revio claims to be the first African payment platform focused on payment failures and revenue recovery. “We also have more features and coverage in the sub-Saharan Africa context, compared to other platforms in the market,” added Dunn. Regardless, the global payment orchestration market, according to reports, is growing at a rapid pace (according to one study, the market size expected to reach $6.52 billion by 2030, with a CAGR of 24.5% from 2022 to 2030) and there is more than enough space for new platforms to grab market share – and as incumbents like Revio expand their reach.
This is one of the reasons why the fintech, created two years ago, raised this capital: to establish itself in new markets in Africa and elsewhere, expand its team and launch new products for its growing customer base.
“I would say the investment in usage is twofold,” Botha said. “The first is accessing more strategic skills around machine learning and data to help us grow and drive better engagement with customers, understand why they are failing and how to get a better response rate. With the data collected, we can begin our experiments in some of the main markets in Africa. We want to operate in around 13 African countries over the next 18 months, but focusing on three or four major markets. And then get enough traction to be able to take on other emerging markets like Latin America.