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Fintech has been one of the bigger stories of the UK startup world — due in no small part to the fact that its capital, London, is also one of the world’s major financial centers. Today, one of those startups made a big splash by buying an incumbent business, and taking on an equity investment alongside that, to scale up its position in the market.

Jaja, a mobile-first business that provides digital and physical credit cards and other financing services, today announced that it will be acquiring the UK credit card accounts for an initial cash consideration of £530 million (or $ 671 million at current rates). It will also become the consumer credit card issuer for the Bank’s UK business and the AA. At the same time it’s also getting an equity investment of £20 million in its own business.

“This announcement with Bank of Ireland UK is an exciting and important development in Jaja’s journey and is part of our strategy to create partnerships that will help more people embrace a simpler way of managing credit,” said Neil Radley, CEO of Jaja Finance, in a statement. “Our vision is to enable a new generation of mobile-first credit card products with unrivalled functionality, service and security. We’re excited to be welcoming Bank of Ireland UK customers as cardholders.”

The Bank of Ireland’s UK credit business includes a number of key accounts covering the AA (UK’s Automobile Association), the Post Office, as well as a card branded Bank of Ireland itself. (It excludes the bank’s commercial card business in the Republic of Ireland.)

The Bank had put the business up for sale some time ago as part of a bigger strategy to divest of its capital-intensive, competitive operations in a push to grow profitability by improving its loans and mortgages business: amid that, the Bank’s wider UK business has been a challenge for it, with investors going so far as to value the UK business at zero earlier this month.

“Jaja is an innovative company which shares our commitment to delivering outstanding customer service. We are proud to partner with them and bring their next generation credit card to customers across the UK,” said Bank of Ireland UK CEO Des Crowley in a statement. “Today’s announcement demonstrates the Bank’s continued progress in delivering against its strategic targets for growth and transformation to 2021, as set out at its Investor Day in June 2018.”

Jaja’s deal is being done in partnership with KKR, Centerbridge Partners and other unnamed investors, who are helping finance the acquisition and are also putting £20 million ($ 25 million) of equity investment into Jaja (pronounced “yah-yah”) alongside it. Prior to this, Jaja had raised about about $ 16 million, including about £3 million by way of the Seedrs crowdfunding platform.

The company is not disclosing its valuation amid this $ 671 million purchase.

A spokesperson for Jaja said the startup is not releasing any numbers today that point to how much the company’s current services are being used. The company, which is today active only in the UK, has taken the route of keeping a waitlist to onboard new users, and it was reported to have some 6,000 people on it back in February just ahead of the Jaja launching its cards.

The company also has a deal with Asda, the UK business of Walmart, to provide financing at the point of sale for its online storefront George.com (an Amazon-type everything store akin to Walmart.com). Given that Jaja has up to now not operated on a massive scale — even if it took on its whole waitlist, that would only number 6,000 customers, for example — it’s likely that this latest acquisition will be adding a sizeable number of users, and key brands, into its stable in one fell swoop.

Jaja was founded by Jostein Svendsen, Kyrre Riksen and Per Elvebakk — London-based Norwegian entrepreneurs who have previously found and sold other financial and tech startups (Svenden, for example, sold a previous company to American Express) — and is currently led by CEO Neil Radley, who had previously been the MD for Barclaycard in Western Europe.

Its key mission has been to bring a more modern approach to the world of credit and credit cards. That in itself is not hugely unique — it is essentially the purpose of all consumer-facing credit startups today — but given that the vast majority of credit services, and transactions, are still handled through traditional channels, it’s disruptive nonetheless.

The company describes itself as digital, mobile-first business, which in its case means that you apply for and initiate services through the company’s app — using your phone’s camera to snap your ID and an AI-based algorithm that takes in other data about you to provide what Jaja describes as “near instant” credit decisions within minutes. Jaja provides physical cards (Visa is its credit card partner), but it also allows people to use the cards through their digital wallets immediately. The company does not change for foreign currency exchanges and offers free cash withdrawal fees, with an annual percentage rate (APR) of 18.9%. And in keeping with what is now par for the course for challenger fintech services, you can use the app to get real-time updates on your account, modify repayments and more.

On that note, in addition to the challenge of onboarding a number of established brands and a large number of users on to a new platform that up to now has been adding users intentionally slowly, it will be interesting to see how and if Jaja can inject more modern infrastructure into those established operations, and a customer base that’s used to the traditional way of doing things. For now, it says that customers of those services will continue to use them as they have done.


TechCrunch

African fintech has taken center stage for the Catalyst Fund, a JP Morgan Chase and Bill & Melinda Gates Foundation-backed accelerator that provides mentorship and non-equity funding to emerging markets startups.

The organization announced its 2019 startup cohort and three out of the four finance ventures — Chipper Cash, Salutat and Turaco — have an Africa focus (Brazil-based venture Diin, was the fourth).

Catalyst Fund, which is managed by global tech consulting firm BFA,  also released its latest evaluation report, which showed 60% of the organization’s portfolio startups are located in Africa.

The new additions to the fund’s program will gain $ 50,000 to $ 60,000 in non-equity venture building support (as Catalyst Fund dubs it) and six months of technical assistance. The funds and support are aimed at moving the ventures to the next phase of catalyzing business models, generating revenue and connecting to global VCs.

“We really tailor the kind of help we give to companies so they can reach market fit and proof points that investors want to see to enable the next phase of growth,” BFA Deputy Director Maelis Carraro told TechCrunch.

Catalyst Fund’s 2019 startup cohort also gained exposure to the fund’s Circle of Investors — a network of impact and commercial backers who can make decisions on investing in and accelerating particular companies.

Next Big Thing and Deciens Capital recently joined the group of 40 investors that includes Techstars and the Mastercard Foundation.

The tenor for support for Catalyst Fund’s newest cohort of startups lasts through 2019. The ventures will also attend the big SOCAP 2019 tech conference in San Francisco, where Catalyst organizes workshops and meetings with its Circle of Investors.

Founded in 2016, the Catalyst Fund’s mandate includes supporting fintech startups that are developing solutions for low-income individuals in emerging markets. The organization has accelerated 20 ventures in Africa, Asia and Latin America that have raised $ 25.7 million in follow-on capital, according to its latest report.

With the Bill & Melinda Gates Foundation and JP Morgan Chase as the lead backers, Catalyst Fund partners also include Rockefeller Philanthropy Advisors and Accion.

JP Morgan Chase’s interest in supporting Catalyst Fund connects to a firm-wide commitment of the global bank to financial inclusion, according to JP Morgan’s Head of Community Innovation Colleen Briggs — who is also a day-to-day Catalyst Fund manager.

JP Morgan recently launched a $ 125 million, five-year commitment to improve global financial health, she explained. “For us there is a true market opportunity…we genuinely believe that financial inclusion is the foundation for the economy,” Briggs said.

“If we don’t get the social issues right it undermines the resiliency of the communities and the markets where we’re trying to operate.”

That Catalyst Fund’s cohorts have shifted toward Africa focused ventures speaks to the thesis for fintech on the continent.

By a number of estimates, Africa’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population.

An improving smartphone and mobile-connectivity profile for Africa (see GSMA) turns this scenario into an opportunity for mobile-based financial products.

Hundreds of startups are descending on Africa’s fintech space, looking to offer scalable solutions for the continent’s financial needs. By stats offered by Briter Bridges and a 2018 WeeTracker survey, fintech now receives the bulk of VC capital and deal-flow to African startups.

Ventures such as Catalyst Fund cohort member Chipper Cash — co-founded by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled — are looking to grow across Africa first before considering any global moves.

The company plans to introduce its no-fee, P2P, cross-border mobile-money payments products beyond current operations in Ghana and Kenya to Rwanda, Tanzania and Uganda within the next 12 months.

Ventures looking to join companies like Chipper Cash as a Catalyst Fund-supported startup can seek a referral from Catalyst’s Circle of Investors — who make a recommendations on new candidates. Catalyst Fund aims to choose 30 startups for its cohort over the next three years, according to program director David del Ser.


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