Y Combinator-Backed Neobank Djamo Secures $17M Funding, Reaches 1M Users in Francophone Africa
Djamo is a pioneering digital banking startup making waves in Africa’s financial landscape, specifically targeting the underbanked population in Francophone West Africa. With a focus on the Ivory Coast and Senegal, Djamo has quickly gained traction, now serving over one million customers across these regions. Their recent funding round of $17 million positions them for significant growth and innovation in the digital banking sector.
Djamo’s Unique Positioning in the Fintech Landscape
Unlike many digital banking startups that target larger markets like Nigeria or South Africa, Djamo has successfully carved out a niche in Francophone West Africa. The recent equity round, which is the largest ever for an Ivorian startup, exceeds Djamo’s previous $14 million Series A funding in 2022. This reflects the growing confidence investors have in Djamo’s mission to enhance financial accessibility and affordability.
Leadership and Vision
Co-founded by Hassan Bourgi and Régis Bamba in 2020, Djamo aims to bridge the financial access gap in French-speaking African countries where banking is often limited to affluent individuals. Many people rely on mobile money, a cost-effective alternative that utilizes phone numbers for transactions. However, this method lacks advanced financial services.
Expanding Financial Tools and Services
Djamo is strategically positioning itself between mobile money solutions and traditional banking. The startup provides the accessibility of mobile transactions while offering advanced banking features. Some key offerings include:
- Savings vaults
- Investment products (a first for the region with a fintech-issued brokerage license)
- Salary-linked bank accounts
Bourgi emphasizes that Djamo caters to a younger demographic that has outgrown basic mobile money wallets but finds traditional banks outdated or expensive. “These users are evolving,” he states. Djamo seeks to be their primary banking solution, focusing on more complex financial opportunities for wealth building.
Reaching the Unbanked Population
While Djamo attracts users with existing bank accounts seeking a secondary option, they recognize that the unbanked segment, which constitutes over 55% of their user base, holds greater long-term potential. To facilitate engagement, Djamo employs a hybrid approach, combining a user-friendly app with offline agents who assist customers in person, mirroring successful models in mobile money.
Future Growth Plans and Revenue Generation
Currently, only 5–10% of Djamo users receive their salaries through the app. Bourgi aims to increase this figure significantly. “The next phase for us is figuring out how to move from 10% to 50% of our users getting their salaries paid directly into Djamo.”
Djamo is also ramping up its services for small businesses, now encompassing about 10,000 merchants. Key features include:
- Bulk payments
- Payment links
- QR code tools for easy payment acceptance
Revenue is generated through merchant fees on online transactions and a premium tier plan, which 25% of users subscribe to. The startup is also exploring new revenue streams like lending and interest on customer deposits, with plans to introduce interest-bearing savings accounts.
Strategic Expansion into Senegal
With its recent entry into Senegal, Djamo faces competition from established players like Wave, a leading fintech known for low-cost mobile money solutions. Instead of competing directly, Djamo complements these services by offering an enhanced digital banking experience with advanced financial tools.
Support from Investors
Djamo’s growth is bolstered by its recent funding round, led by Janngo Capital, a pan-African, gender-focused venture capital firm. Fatoumata Bâ, founder and executive chair of Janngo Capital, expressed enthusiasm for Djamo’s mission to transform financial services access in Francophone West Africa, especially for women.
With additional backing from several investors, including Partech and Y Combinator, Djamo is well-positioned for growth in the rapidly evolving fintech landscape.
For more insights into the fintech sector in Africa, visit our fintech news section.
