Payment processors such as Visa or Mastercard are used for global financial transactions. They are in charge of communication between banks and fintechs.
Africa has its own quirks. It isn't a predominantly card continent. The majority of online financial transactions in the region are carried out by banks and telecom companies. There is no interoperability for transactions between the two systems when users make transactions within their unique environment.
An alternative payment network with connected wallet allowing a mobile money user to transact with a bank account would fix this problem. The unified payments app has raised over $30 million in a seed round.
Prince Boakye Boampong started the company. Boampong was the co-founder of OMG Digital, a YC-backed Ghanaian media startup, before Dash.
Boampong was fascinated by how unbanked people in Africa send and receive money using mobile money, a system of payments pioneered by M-Pesa, which has close to 30 million customers. Boampong had a background in mobile money and experienced the challenge of interoperability within and outside mobile money systems.
I was blown away by the convenience and ubiquity of mobile money when I visited Kenya for the first time. There are over 200 mobile money wallets and 100 banks that don't work with each other, according to the chief executive officer.
It's difficult to send money to a person in a different country because both mobile money operators don't allow transactions between each other.
A Nigerian or South African with a bank account can't make transactions with an M-Pesa mobile money account because of the difference in payment ecosystems. They need to swap their home currency for a foreign one when they travel.
Dash's alternative payment network brings together mobile money and traditional banks to facilitate transactions. It does not aim to replace banks or mobile money. Users can access a plethora of services they can't find on their traditional provider with its wallet.
Boampong said that they are building this interoperability so that a person travelling from one country to another would be able to pay for their purchases in one currency.
Dash is similar to Visa or Mastercard in that it uses banks and telcos to route payments. For now, users from different countries can connect their bank or mobile money accounts to Dash, pay bills, and send and receive money to other users while the platform handles currency conversions.
The team.
The company makes revenue from processing fees, savings, and commission when Dash is used cross-border, bill payments, and subscription.
Dash claimed to process over $300 million in TPV in January. Since its launch in 2020, it has processed over $1 billion from 1 million customers, Boampong said.
Dash first closed its seed round before re- opening in October of last year, and these numbers show the tremendous growth. A large seed in its own right, and having acquired just a little over 200,000 users with transactions reaching $250 million, the Ghanaian fintech was at the time.
Dash tripled the size of its initial investment in five months. $32 million is an incredibly large seed that could cause more harm than good for a three-year-old company. Boampong disagrees.
For most products, it is either you are figuring it out or you have figured it out. We were surprised by the growth in a weird way. He said that the company raised more money to meet the demand because they didn't prepare for the growth.
Dash's seed round, led by New York-based Insight Venture Partners, is one of the largest of its kind in Africa. A wave of innovation is rippling through the sector, which accounted for up to 60% of Africa's total VC funding last year.
This deal is noteworthy because it takes attention from Nigeria, Africa's hottest fintech scene, to neighboring Ghana, where venture capital raised by its startups reached a meager $167 million last year.
Other investors in the round include Global Founders Capital. They were part of a group that included ASK Capital, Techstars, Guillaume Pousaz's Zinal Growth Partners, Jitendra Gupta of Jupiter Money, and the founders of Moss.
The funding will allow the company to expand to new markets such as South Africa, and get the licenses needed to operate there.
African tech took center stage in 2021
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