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Paycode receives investment to expand biometric financial inclusion efforts

Paycode receives investment to expand biometric financial inclusion efforts

Investment One Financial Services has taken a stake in biometric financial inclusion fintech Paycode to extend access to basic financial services to more Africans, This Day reports.

The investment is being made through venture capital subsidiary Investment One Vencap Limited, in support of the institution’s commitment to address excluded sectors of the Nigerian economy, as well as to achieve strong returns for investors.

South Africa-based Paycode gained prominence in digital ID circles with the announcement earlier this year of a partnership with Mastercard intended to provide biometrics-backed digital ID for financial inclusion to 30 million people in Africa. Paycode’s contribution is low-cost solutions that can be used for cash pay-out, mobile money transfers, remittances, insurance, microloans, airtime, utilities and social grants that can be used in areas with little or no connectivity to the internet or mobile networks, by combining biometrics with payment technology in one platform.

Paycode CEO Ralph Pecker says the company sees more than an equity partner in Investor One.

“They are a significant and innovative player in the financial services sector of Nigeria, a key growth market for the organisation,” Pecker says, according to This Day. “We believe that having them on board will greatly accelerate our expansion objectives in Nigeria and that we, in turn, can provide an excellent return on their investment.”

He said the investment was motivated by Paycode’s market position, valuation based on current revenues with reasonably discounted cash flow, and growth potential through projects already won by the company in Nigeria.

Paycode’s active user base is made up mostly of people in Ghana, Zambia and Mozambique, but Pecker sees Nigeria and the DRC as key markets for its growth potential.

The company is also reportedly planning a Series A capital raise for the first quarter of 2022.

The amount and terms of Investment One’s funding contribution were not disclosed.

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