In 2018, I was working on the Africa VC report for WT when the name Cellulant caught my eye. This fintech company from Kenya had raised an impressive USD 47.5 M in Series C funding, while most startups that year only secured an average of USD 50 K. During that time, accelerators and grants were the most vibrant sources of funding.

I have a clear recollection of this event, as there was much discussion following the release of our report regarding whether or not Cellulant could be classified as a startup. Interestingly, those who were active on Twitter at the time were advocating for MFS Africa to be recognized as a startup.

Cellulant was already established in 11 countries and valued at over USD 100 M at the time of closing that Series C round. This was the second-largest startup funding round for an African tech company at the time, with the exception of Jumia’s. Co-founders Ken Njoroge and Bolaji Akinboro seemed to be making significant strides towards building a unicorn.

The impact of Cellulant on Africa’s fintech industry can be likened to Flipkart’s influence on India’s e-commerce industry, as it created a category that remained attractive for investment. Cellulant’s successful funding inspired numerous fintech startups to aim higher, resulting in sustained growth for African fintechs.

A bit of backstory

In 2003, Cellulant began as a company that sent bulk SMS messages and sold caller ring-back tunes. It followed a similar path to PayTM of India, which began in the early 2000s and diversified into digital services. In 2008, Cellulant recognized the need to pivot and developed a Payment system for banks. By 2010, Cellulant had become one of the largest payment facilitators in Africa. As the company continued to grow, it diversified into niche areas such as agriculture financing. 

Bolaji relocated to Nigeria in 2012 to serve as Co-CEO and subsequently spearheaded Agrikore, a product line dedicated to financing smallholder farmers who have historically been neglected. Meanwhile, Njoroge continued to work towards expanding Cellulant’s reach from Kenya.

Cellulant’s growth trajectory was disrupted by a series of unfortunate events shortly after the big funding round. In 2019, the fintech suffered a devastating loss of six members in a terrorist attack that occurred in Nairobi. In addition, the company faced internal turmoil that resulted in both Co-founders stepping down.

At this time, the company was facing extreme challenges not just because of leadership issues but uncertainty about almost every aspect. But, perhaps it was time for real change. By 2020, Africa’s fintech space had already pulled in more than USD 800 M (from USD 285 M in 2018) in venture capital funding. The dynamics had changed, and a spate of fintech startups joined the landscape. But, Cellulant was trying to find its way forward.

In 2021, Akshay Grover joined as the CFO of Cellulant. Within a short period, he was responsible for leading the company as CEO during its recovery phase.

I caught up with Akshay in Nairobi to stay updated on the latest movements in the fintech industry and developments at Cellulant. It was surprising to discover that, like Cellulant, Akshay’s efforts were also somewhat underrated. Recognizing and appreciating the teams behind successful startups, not just the companies and valuations, is important. And Cellulant is one such narrative.

Here is a download of my exclusive conversation with Akshay Grover, CEO of Cellulant, who took me through the startup’s journey after its founders. 

Setting the foot to play new innings  

Despite being hired to take on a finance role, Akshay quickly assumed a leadership role in the company and began to oversee all aspects of the business. It was a time when Cellulant was transitioning from a banking-focused transaction processor to a merchant payment business. This, coupled with entry into new geographies and product launches, meant the organisation has been through significant change and change management was a key challenge.

Grover says, “The great thing about Cellulant is its entrepreneurial culture, which has enabled us to succeed in this transition. Over the last two years, we have successfully productized our services and migrated to a micro-services and cloud-based architecture, which has led to a quantum leap in service levels for our customers.”

Akshay emphasizes that his team has worked for the past two years to facilitate seamless payments and payouts for businesses operating in Africa and have improved their product to enhance accessibility and reliability. The company has put together 3 offerings that give a 360-degree solution to its customers, ranging from Checkout to Instore payments and Payouts.

Cellulant’s market expansion plan has been a crucial strategy for its growth. Over the past two years, the Kenya-born startup has expanded its presence from 10 to 19 countries, establishing a pan-African footprint. Notable new territories include South Africa, Egypt, Morocco, Senegal, Ivory Coast, and Ethiopia. Cellulant holds a range of local licenses or no objection certificates in each of these countries, has a team on the ground, and can offer merchants access to the required local payment options.

“As a result of our focus and investment in these areas, we’ve seen our payment volumes for merchants grow over 100% year-on-year. We’ve made significant progress, having processed transaction volumes worth USD 12.8 B in 2022 alone,” says Grover. 

2020-2022: The Period of more

Cellulant initially concentrated on the online checkout segment. Although this area is still expanding for them, they have also ventured into the offline (in-store) checkout sector since the beginning of 2021. Currently, Cellulant boasts around USD 225 M from Instore in annual processed payments in three out of its nineteen markets, namely Nigeria, Ghana, and Zambia. Furthermore, its cross-border payouts business has grown significantly, as it now processes over USD 300 M in business and individual payments across various African markets.

Cellulant is now focused on enterprise business, with a merchant base that has grown from approximately 600 in 2021 to over 1500 by the end of 2022. The fintech company now serves a variety of businesses across sectors such as oil and gas, ride-hailing, e-commerce, travel, logistics, retail, airlines, and fast-moving consumer goods. Some of the businesses Cellulant serves include Emirates, KLM, Booking.com, Bolt, Multichoice, Jumia, Zen Petroleum, Star Oil in Ghana, Atheneon in Zambia, Glovo, Hotpoint and Simbisa in Kenya, and Dominos in Nigeria.

Cellulant’s boss shared that the company has experienced a 100% year-on-year growth in its customer base for merchant products from 2020 to date. The company attributes this success to its ability to provide a single API that works across multiple markets and payment methods while also offering access to settlement and a range of product options. By tapping into this gap in the market and providing seamless payment options for an expanding customer base, Cellulant is able to attract customers with its diverse offerings. 

The fintech’s payment infrastructure includes over 370 banks, wallets, and stores of value throughout Africa. Its newest advancement allows for point-of-sale (POS) payments at stores in Nigeria and Ghana. These Android POS devices can process card payments and offer the ability to process mobile money and direct bank transfers without the need for debit cards.

Cellulant 3.0

Cellulant has raised USD 55 M in funding to date, showcasing remarkable growth relative to other heavily funded fintech companies in Africa. This growth can be attributed to the company’s consistent revenue stream. Perhaps, it can be seen as a capital-efficient company because most of its counterparts’ accelerated growths come from massive funding rounds.

It is important to note that while Cellulant may not offer payment integration for high-traffic, non-mainstream businesses such as e-sports and online betting, its customer base remains significant compared to other consumer-facing fintech players. Despite announcing plans for a Series D funding round last year, the company has put these plans on hold, demonstrating its strategic approach to growth and development.

Akshay explains, “Our current investors are supportive of our business and outlook. Our strategy today is focused on prioritising sustainable growth and aiming to be a profitable business.” The company plans to resume the fundraising effort when it is determined that it is the right time to raise third-party capital for the company’s growth.

It appears that Cellulant is focused on building a fundamentally sound business. It does not seem keen to be a PR success story; rather, it seems focused to be a real success story.

African fintech startups are facing a significant increase in cyber-attacks and fraud as they experience rapid growth. It’s a known fact that these incidents often occur when startups find it challenging to balance growth and processes. The recent news of marquee fintechs struggling with court cases for fraud and money laundering is alarming. However, Cellulant appears fully aware of this “cost of growth.” The company claims to have attained global security, privacy, business continuity and service management standards. The company’s certifications include ISO 27001 (ISMS), ISO 27701 (PIMS), ISO 22301 (BCMS), ISO 20000-1 (Service Management) and PCI-DSS.

Compliance with local regulators is a crucial factor for fintechs. An African startup that raised substantial funding last year faced difficulties acquiring an operational license due to regulatory issues. Outdated regulations can limit a fintech’s ability to innovate, which can adversely affect their solution’s strength and security. Therefore, it is vital for fintechs to maintain open communication with regulators to ensure they can develop the best solutions while adhering to regulations, something Cellulant has prioritized internally as it holds licenses in major markets like Kenya, Ghana, Nigeria, Zambia, Botswana, and Uganda.

One of the hurdles fintechs face is user adoption. It’s crucial that customers trust a payment method before they use it. Despite being more efficient than traditional systems, fintechs may struggle if users don’t have faith in them. That’s why many solutions partner with established companies in the payments industry. This strategy helps build trust and encourages adoption. Cellulant has a screening and approval process for merchants to establish trust amongst its users. They ensure that all legal requirements for operating in a specific market are met.

The Game Plan

Akshay believes that the fintech market is far from being saturated. He is confident that both existing players and new entrants will continue to experience substantial growth across the continent in the medium to long term. While a brief slowdown may occur in the short term due to the macroeconomic environment, it will be insignificant in the face of continued growth over the next decade or more, he reckons.

Joined at the hip with Cellulant and leading its 450+ team members, Akshay is quite forthcoming in acknowledging his team’s contribution. Akshay comes across as a firm and quite straightforward leader. None of his responses to my questions were anything other than numbers or facts.

Akshay’s team spirit is quite evident in his answers. “At Cellulant, we believe deeply that there is no strategy without people,” he emphasizes.

When I asked Akshay about what’s next for Cellulant, he lay his plans by saying, “We aim to provide simple, reliable and affordable digital financial services and benefit more than 1 billion users on the African continent from access to commerce, payments, banking and financial services.” He says this in the same matter-of-fact manner.

He adds, “We are also looking into ways of serving our overseas customers better and being more accessible to them.”

I also learnt from the Cellulant team that they are currently in the advanced stages of a pilot launch of merchant lending solutions that would address the merchants’ working capital challenges. 

Akshay says he is committed to not only developing a top-performing team but also prioritizing customer satisfaction. These principles are deeply embedded in the culture at Cellulant, he emphasises. In an email response describing their recipe for success, the Cellulant team emphasized the significance of customer delight. They stand out as leaders due to their willingness to engage in difficult conversations and consistently pursue improved results, they added.

The Cellulant team believes in keeping things simple and connected to ensure efficient decision-making that prioritizes the customer’s interests. By cutting through unnecessary clutter, they stay agile and effective.

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