According to reports, three out of ten payments fail in Africa. Factors behind this range from a fragmented payment landscape and invalid cards to dormant accounts and higher litigation; they surface annually, leading to a loss of $14 billion in recurring revenue for digital businesses across the continent.
These issues are bound to increase as digital payments continue to grow in Africa, 20% year on year, according to some reports. And while gateways and aggregators have made it easier for businesses to accept multiple payment methods, few solutions exist to force them together and deal with payment errors that arise from each platform. That’s true Revioa South African API payment and collections company, enters. The fintech that makes it easier for businesses across Africa to connect to multiple payment methods and manage payment errors announces it has raised $1.1 million in seed funding.
Fintech investor SpeedInvest led the round, with the participation of Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also participated, including payment and revenue recovery experts from Sequoia, Quona Capital and Circle Payments, according to a statement shared by the startup.
Revio was founded by Ruan Botha in 2020. As a professional who has been working in the banking and insurance industry in South Africa for over a decade, Botha decided to launch Revio after seeing how much time and manual effort companies spend on engaging customers with outstanding and failed payments. It was clear that very few companies had meaningfully invested in revenue recovery. When we asked more than 25 customers where they would invest $1 if they needed to fix their payment systems, most said they would spend at least 90% of that money managing failed payments and customer churn.
“We have the debit order as the largest recurring payment method in South Africa. But when companies want to start adding other payment methods to meet customer demand, it was super hard for them to do that,” Botha told businessroundups.org in an interview. “And it was just because of the disconnection between banks , new fintechs and payment aggregators that also made it difficult for companies to collect ongoing recurring revenue, so with Revio we wanted to make it super easy for companies to connect all the payment methods they need, not only in South Africa but also in the rest of Africa and worldwide.”
Botha is joined by three executives who run the company’s affairs: Chief Commercial Officer Pieter Grobbelaar, an ex-country leader at Flutterwave; head technology Kyle Tituswho has experience working with fintechs and a venture studio and chief operating officer Nicole Dunnea venture builder and operator who has worked with multiple African startups.
Dunn, speaking to businessroundups.org alongside Botha, said Revio is merging and orchestrating multiple different payment methods across Africa, including card, wire transfer, debit order, mobile money, vouchers and QR code. The platform collects and settles payments in more than 40 markets through payment providers such as Flutterwave, Paystack, Ozow, and Stitch. Some of the features, in addition to multiple payment methods, include smart payment routing, automated billing processes, automatic retirement, and real-time analytics and reporting.
In more than a year of operation, Revio has more than 50 clients on board and processes thousands of transactions every month. They range from large-scale enterprises to medium-sized companies and high-growth scaleups involved in recurring revenue businesses and high transaction volumes, which typically require multiple payment methods in multiple markets. These are often insurers, telcos, retailers, subscription software or media, asset leasing or financing companies, and alternative lenders.
“We then also built out orchestration capabilities that help us reduce payment failures through things like smart transaction routing, smart re-efforts to make sure a customer doesn’t fall behind on payments, especially on recurring payments,” said Dunn. “And then where we differentiate ourselves is that we serve businesses with recurring revenue rather than the typical e-commerce platforms.” She adds that Revio has more than 100 customers in the pipeline waiting to get on board.
Payment orchestration is becoming increasingly important in today’s world where businesses operate in multiple countries and require a variety of payment methods to make ends meet. While a handful of such platforms exist in the US and Europe to handle this heavy lifting through unified payment APIs like Primer, Fast and Zooz, emerging market companies are starting to put identical platforms like Revio and Egypt-based MoneyHash front and center in different regions.
On the subject of competition and how it stands out, Revio claims to be the first African payments platform to focus on failed payments and revenue recovery. “We also have more functionality and coverage in the Sub-Saharan African context, Sub-Saharan compared to other platforms in the market,” added Dunn. Anyway, the global payment orchestration market is reportedly growing at a rapid pace (according to a study, the market size is expected to reach $6.52 billion by 2030, with a CAGR of 24.5% between 2022 and 2030) and there is plenty of room for newer platforms to gain market share – and incumbents like Revio to expand their reach .
It’s one of the reasons the two-year-old fintech raised this capital: entering new markets inside and outside Africa, expanding its team and launching new products for its growing clientele.
“I would say the utilization investment is twofold,” Botha said. “One is to access more strategic skills around machine learning and data to help us grow and drive better engagement with customers, understanding why they fail and how to get a better response rate. With the data from that, we can start experimenting in some of the core markets in Africa. We want to be active in about 13 African countries in the next 18 months, but focus on three or four major markets. And then get enough traction that we can take into other emerging markets like Latin America.