Over 40 African startups from a handful of countries have passed through YC in the past decade. Zambia joins this list today, and its participant, Union54, is a worthy first entry.
Union54 (54 is a nod to the number of African countries) is a fintech company founded by Perseus Mlambo and Alessandra Martini. The startup claims to be the first card issuance API in Africa and the only correct launched this year. But to paint the picture, Union54 did not come out of nowhere; it’s a project of the couple’s previous start-up, Zazu.
Zazu Was launched in 2015 as a challenger bank in Zambia. As with any fintech on the continent, Zazu had to create their own debit cards that users could connect to a wallet. Most of the time, Zazu would have to wait months for the country’s partner banks to issue these cards. Mlambo tells me that at one point they had to wait 18 months.
All this while the founders started working with banks in the region to start issuing cards themselves.. But the banks were lethargic in their efforts. “We correct realized that neither the processor nor the bank were necessarily well equipped to be able to answer our questions or to be able to give us the product we are looking for, ”Mlambo told TechCrunch in an interview.
The startup decided to hit the nail on the head and meet Mastercard. I mean, why wait for the banks when you can wrap up whoever issues these cards in the first place, right? Ultimately, the company obtained an adhesion to the principle Mastercard, the first fintech of Africa, she affirms.
As a main member, Zazu became authorized to act as “issuing bank”. In other words, they can provide debit cards and as “acquirers” which means they can provide transaction processing services.
Along the way, the founders realized that To really to advance African fintech, it was imperative to facilitate the issuance of virtual or physical debit cards for fintechs of any African country. The team therefore spun Union54 from Zazu. The platform now has many APIs that allow any fintech to easily issue programmable debit cards.
“We have now used our membership to be able to help other companies, any African fintech that wishes to issue its own cards.. They can correct come see us, connect to our APIs and move around fast, without needing to spend a lot of time negotiating, ”Mlambo said of providing the service to other African fintechs.
CEO adds company targets fintechs who don’t want to spend hundreds of thousands of dollars on setup fees To get virtual or physical cards. Union54 claims to issue cards within weeks through an API that does BIN sponsorship, program management, and settlement, among other features.
Being able to do this gives Union54 the right to boast of being the first card issuing API in Africa. Fintechs have rarely looked at this opportunity; more are concentrated in other segments, from payment gateways to wallets. This is an interesting point to note because somehow all of the big players in these segments end up trying to create virtual and physical cards for their customers and face complications.. This is the void Union54 wants to fill, and although it is currently in beta, the company boasts of an impressive anonymous customer base on its waiting list and currently using the platform.
“The fascinating The thing about these companies is that they are not B or C players. They are in the top 5% of African fintechs.. And for me, I always tell people, we are now in the golden generation of African fintech. So it’s really the perfect time for a card issuing product to work with all these guys considered leaders in their space. This means that we really have something that people want to use every day, ”added the CEO.
On the company’s site, there are eight use cases for its API: ledger-based, acquirers / gateways, buy now, pay later, credit union, delivery companies, digital banking, card management. credit and corporate cards.
FinTechs using Union54 are also allowed to design the cards and set the currency they want the cards to be in. be charged, and compile a complete catalog of who will use them, what they to be used because when they do to be used and how are they to be used.
Union54 charges fintechs on a pay-as-you-go basis for each API call. If a fintech company wants to create a physical card, they are loaded fixed costs between $ 7 and $ 9 and fixed costs not disclosed during a transaction is made.
Mlambo says entering the YC 2021 summer batch allowed the company to sign up its first set of clients, as most of them are from the YC network.. He calls YC a program that “was worth it from day one.”
“I am really excited and proud that Union54 has become the first Zambian fintech to be accepted into Y Combinator. And the second in southern Africa. As you know, when global investors look at Africa, they often do it from a West African perspective and our entry into Y Combinator validates a small part of our larger assumption: it is possible to serve Africa from friendly jurisdictions such as Zambia.