UK hedge fund in $120m deal with Visa

A UK-based hedge fund has backed a $120 million investment round in a South Africa-based financial services technology company, with Visa also investing in the deal.

Kingsway Capital has backed funding round in Jumo World, investing alongside Fidelity Management and Research Company, backing the round as new investors.

This round also includes a number of undisclosed existing investors.

Kingsway Capital was set up in 2015 to back deals globally.

Fidelity Management and Research is a venture capital firm that was created in 1946 to back deals globally.

Jumo will use the new capital for capacity expansion, with the company looking to build out its platform and scale its capacity. This will enable the company to evolve its services and increase the number of financial products.

Part of the capital will also be used for geographical expansion, with the company looking to grow its footprint regionally across Africa. Jumo is primarily targeting expanding to Nigeria and Cameroon.

Jumo is being backed based on growth prospects, with the company having a scalable lending platform, according to Visa.

Manuel Stotz is chief investment officer at Kingsway.

William Dailey is chief operating officer at Fidelity Management.

Melissa McSherry, global head of risk and identity services at Visa represented the strategic investor.

Previous investors in the company include Leapfrog Investments, which first backed Jumo in 2015, investing $25 million, and also backed a $52 million funding round three years later in 2018.

LeapFrog structured the 2018 deal through its sophomore fund, LeapFrog II, a $400 million financial services-focused vehicle closed in 2014.

Leapfrog also sealed a follow-on investment in Jumo in 2020, backing a $55 million investment round in the company– structured as both equity and debt.

The investor was joined on the deal by Goldman Sachs and Odey Asset Management who were also in the deal as existing investors.

Other previous investors in the company include Vostok fist backed Jumo in 2015, Finnfund initially injected capital in Jumo in 2017, investing $6 million worth of debt as part of a $24 million deal arranged by Gemcorp.

Proparco first backed Jumo in 2018, injecting $3 million worth of equity into the company.

The company has also received capital from Google, which backed Jumo through its Launchpad Accelerator platform in 2017.

Headquartered in Cape Town, Jumo is a software company that provides a platform which enables financial services providers and mobile network operators to offer financial products to retail customers.

Clients include MTN and Airtel, and financial services providers First National Bank, Old Mutual and Letshego, who are able to sell their financial products to retail customers.

Jumo uses data analysis and technology to create predictive modelling for financial services providers and mobile network operators.

The company has provided its services to over 18 million people, originating over $3.5 billion in loans, since inception.

Jumo has offices in South Africa, Kenya, Uganda, Tanzania, Rwanda, Ghana, and Zambia in Africa, Pakistan in the Middle East, Singapore in Asia, and the UK in Europe.

Created in 2009, as African Finance Bank Mauritius (afb), the company changed its name to Jumo in 2014.

Jumo is headed by founder and chief executive officer Andrew Watkins-Ball and employed over 300 people, as of 2021.