Union54, a YCombinator-backed Zambian startup that issues USD virtual and physical debit cards through their API, has announced its raise of over $3 million in seed funding to scale its business. This comes at the heels of its graduation from Y Combinator’s summer batch program for startups, as the first Zambian startup to make it into the renowned accelerator program.
The round was led by Tiger Global, with the participation of San Francisco-based venture capital firm, Runa Capital, Ace & Company, Todd & Rahul Angel Fund, and Vibe VC. Some high net worth individuals such as Babs Ogundeyi, CEO of Nigerian digital bank, Kuda, Risana Zitha, Managing Director of Renaissance Capital, and Gbenga Ajayi, former Director of SMB Growth at Wise, took part in the funding round.
Tiger Global has been a strong backer of fintechs, especially this year, with its investments in Flutterwave, Fairmoney, and Mono. Without a doubt, the VC firm is interested in the dynamic growth potential that the fintech ecosystem in Africa possesses.
Union54: API for issuing cards
Founded by Perseus Mlambo and Alessandra Martini, Union54 is an API platform that enables software companies in Africa to issue and manage their debit cards without the need for a bank or third-party processor. The company was an offshoot of the challenger bank, Zazu which they had launched in 2015.
While at Zazu, Mlambo and Martini noted the difficulty in getting cards issued to customers and the challenges they faced in interacting with card issuers. These challenges helped to birth Union54, as a solution to these problems faced by African startups.
The founders claim that over 50 companies, ranging from post-Series A fintechs, to banks, to a myriad of other companies, are in Union54’s API sandbox platform. These companies have begun issuing virtual cards to their customers through the platform, with a target of getting in 30 more companies. Flutterwave, Payday and Plumter, as well as Bitmama, the crypto exchange startup, are partnering with the dynamic startup.
Mlambo is enthusiastic about the growth opportunities that Union54 has on the African continent, especially because of the unique value that the startup offers its customers and clients.
Speaking on the funding round success, Andre Bliznyuk, General Partner at Runa Capital, expressed the excitement of the VC to support the vision and business of Union54,
With the significant growth in the fintech space, a lot of fintech startups are springing up to address salient issues and challenges with payments and finance across the continent. In choosing to address the issues relating to card issuance, Union54 has chosen a specific niche from which to grow and offer value to the entire fintech space. Without a doubt, this specificity of purpose helps to better position them within the industry for growth and visibility.
With the funds, the company hopes to accelerate its growth across the African continent by expanding its employee ranks in engineering, product, marketing, and sales. It would also utilize the funds to attract more customers and position itself for a future raise.