Union54, a card-issuing fintech startup based in Zambia, has completed its seed extension round, raising $12 million from a number of investors.
The funding round was led by Tiger Global, with participations coming from investment firms like Vibe VC, Earl Grey Capital, and Packy Mccormick’s Not Boring Capital.
Union54, which uses its Application Programming Interface (API) to issue and manage debit card services, was founded last year, and participated in Y Combinator’s summer batch 2021. The startup was born out of the frustration the founders went through when they tried issuing debit cards for their previous startup – Zazu Africa.
About six months ago, Union54 announced that it completed a $3 million seed funding round which had participate from Tiger Global, Runa Capital, Ace & Company, Todd & Rahul Angel Fund, Vibe VC as well as some angel investors.
The fintech startup was co-founded by Perseus Mlambo and Alessandra Martini. The husband-wife duo had in the past, founded another startup which is a money management app called Zazu Africa. Zazu had also gone through crowdfunding to push its operations.
Union54 is a startup that works on easing and enabling cross-border payments. This is done by allowing software companies around Africa to issue and manage their debit cards, using its API, and without requiring a bank or a third-party processor.
The startup aims to be a continental alternative card-issuing platform, breaking the dependency on giants like MasterCard and Visa, both of whom are currently dominating card services around Africa.
“The purpose of creating another card network is an inspiration of what’s happening right now. Number one, we’re vulnerable and hostage to any political decisions that might affect trade on the continent. And if anything were to happen, we would wake up and would not have access to our funds,” Perseus Mlambo said.
“Number two, when you think about the card networks today, they’re not fit for African merchants because settlement is often taking three days for a local debit card, maybe it’s taking over seven days for an international debit card. There’s a significant opportunity as the world realigns itself; we need to get to a point where we’ve got a payments route that needs to be developed locally for local use,” Perseus added.
CEO, Perseus, noted that in the first month of Union54’s operation, it had a revenue south of $3,000. However, the startup’s revenge grew by 600% in the following month, and has continued to grow by 50% month-on-month.
The startup claims it has issued over half a million virtual debit cards to customers, and is believed to be clocking monthly revenues of around $100,000, which is close to 1% of the value of amounts processed.