Kenyan fintech startup raises a $16.7m seed round in 4 years

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KENYA – Kenyan fintech startup Zagace has quietly raised a US$16.7 million seed round since 2016 as it plans to expand globally.

Founded in 2013 by Mubarak Muyika in Kenya, Zagace provides software packages composed of accounting, bookkeeping, payroll, sales, marketing, stock management and storage.

Targeting micro-businesses with 10 employees or less, Zagace’s core product – the Zagace Web Platform has grown into an application store with distribution of products mainly through product APIs, a digital distribution platform and development platform.

As of December 2019, the startup had over 1.5 million account subscriptions for its different products from 20,000 small business customers in over 30 countries.

 In 2016, Zagace began a capital raise to meet the costs of customer acquisition which it recently closed out at US$16.7 million.

Investors in the startup include the Tim Draper-backed DraperDarkFlow, BlackRock Capital, Dubai’s UHT Investments and the San Francisco-based P Management 415 Inc as well as a host of other minority shareholders.

Almost half of the funding was secured earlier this year.

In an interview with Disrupt Africa in 2016, Toro Orero, then of DDF, cited Zagace as one of the VC firm’s portfolio companies but other than that, the startup’s funding has largely gone under the radar.

It is estimated that that only 11 African fintech companies, and only two from Kenya have raised more than Zagace over the period in question.

The startup is now working to scale its platform to more markets in Africa, the Middle East, Europe, and the United States (US) by ramping up access to its application offering through product APIs and related integrations.

Despite the effects of COVID-19 pandemic on businesses, African startups seems to have taken advantage of the disruption to raise capital for their expansion.

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