HBD Venture Capital, the venture capital firm established by entrepreneur Mark Shuttleworth, has invested R36-million into Fundamo, which develops mobile banking and payment solutions. The company will use the capital to expand into Africa, the Middle East, Asia Pacific regions and the US.
Fundamo, which provides the software for MTN Banking among others, is already one of the top players in its industry globally and won the international Frost & Sullivan Technology Leadership Award in 2006. The company’s software is used by banks, mobile operators and financial services companies to deal with transactional banking and third party payments on mobile phones.
Julia Long, CEO of HBD, believes that Fundamo has exceptional potential. “This is a very interesting company, not only because they spotted the gap in this market long before the rest of the world but because they have consistently improved their product to the world-class standard it is today.
“It is a more mature company than our usual investments as it is profitable. However, it still fits many of our investment criteria such as the fact that it was started by a passionate local entrepreneur, has exceptional growth prospects and has global potential but will remain a truly South African operation.”
She says it did not have any strong competition locally so there were good opportunities at home as well as abroad. “It is a company we are very excited to become involved with.”
Hannes van Rensburg, founder and MD of Fundamo, says the deployment of mobile phones has grown massively in the past decade.
“It is a great time to secure the role of leader in the mobile banking market. This is especially true in developing countries. These are short of both physical banks and internet outlets, so banking from cellphones is the logical solution. We are perfectly poised to capture these markets and HBD’s investment has given us the impetus to do so without delay.”
“Our vision – that mobile phones present a huge opportunity to provide better banking to all – has become a reality, with strong demand across all markets. In developing markets this means reaching many more people with banking and payment services. While in developed markets it simply means convenience for an increasingly mobile lifestyle.”
Van Rensburg says there are four powerful drivers for delivering better financial services on the mobile channel: intimacy – it is a uniquely personal device; ubiquity – it reaches more people than any other electronic channel; immediacy – it is real-time and interactive; and utility – the consumer can do more.
“For these reasons, and for the reasons of convenience and efficiency, the future for mobile banking and transacting is a very rosy one,” he says.