In order to improve digital communication in Africa, Termii, a pan-African communication platform-as-a-service (CPaaS) startup, has raised $3.65 million.
If Termii had its way, the digital communication industry in Africa would be decades ahead of the rest of the world in terms of innovation.
The Y Combinator-backed firm has just completed a $3.65 million funding round in order to realize its objective of reinventing the communication that occurs between African businesses and the customers of those enterprises.
After receiving seed funding of $1.4 million in January 2021, Termii has successfully raised a new round of capital, which was led by an Africa-focused venture capital firm called Ventures Platform. This demonstrates the confidence that investors have in the under-funded CPaaS sector. According to Gbolade Emmanuel, the Chief Executive Officer of the company, “Not many companies in this space are raising capital, but Termi is doing many things right. Our product is not a nice-to-have; it’s a painkiller.”
Other investors, such as Fintech Collective, Launch Africa Ventures, Nama Ventures, Aidi Ventures, NOA Capital, Assembly Investors, Ralicap Ventures, Now Venture Partners, Vastly Valuable Ventures, Adamantium Fund, MyAsia VC, Uncovered Fund, Probability Ventures and Afropreneur Angel Group, participated in the round of funding as well. Angel investors who wrote their way into Termii’s cap table include people like Aubrey Hruby of Tofino Capital and Eamon Jubbawy of Onifido.
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Some backgrounds on Termii
Termii was established in 2017 as a messaging solution that enabled businesses to engage with their users across numerous platforms. Since then, the company has developed its product portfolio to the point that it now functions as a one-stop shop that powers interaction between businesses and their users. If you have ever attempted to make a payment using a fintech gateway, such as Paystack’s, and waited for an OTP text message in order to complete the transaction, then there is a good probability that you have encountered Termii in action.
The infrastructure provided by Termii enables customers to communicate in a quick and safe manner with approximately 9,000 different fintech companies, such as Moniepoint, Chipper Cash, and Piggyvest, among others. According to Gbolade, the function that his startup plays in the day-to-day activities of African fintechs is a primary advantage that is appealing to investors like Fintech Collective, a global fintech-focused VC firm that participated in the round. Termii asserts that its client list of over 10,000 users is comprised of companies operating in a variety of industries, including the healthtech and logistics industries.
How Termii maintains its success
According to Gbolade, one of the arguments that Termii presented to investors that was successful was the company’s most recent product, which he referred to as a “game-changing unified communications app” (Termii Go). Termii Go is an upgrade from Termii’s traditional covert infrastructure operations, and it is scheduled to be released to the public later this month. The software brings together Termii’s enormous client network from all over Africa on a single platform, making it possible for consumers and businesses to participate in interactions more quickly and in real time. This combines a customer relationship management (CRM) application with a mobile communications infrastructure for businesses.
Termii Go is also an innovation over traditional text messaging, which can be read or intercepted by dishonest players. This ensures that vital information is not compromised even if a device is lost or stolen. By forming strategic alliances with mobile device makers such as Tecno and Infinix, the company has developed a product that can sidestep the use of third-party messaging gateways and ensure that messages are delivered more promptly.
The fact that Termii Go may be plugged into already established mobile virtual operators gives customers the ability to make and receive calls as well as access the internet through a globally responsive electronic SIM card. This is probably the most intriguing aspect of Termii Go. This is still a business-to-business play, which broadens the range of contact between teams while keeping costs down.
Gbolade discussed the device and stated, “There’s no product like ours in the African market. We are bringing world-class innovation to the communications sector which has historically been controlled by a few mega players. Our goal at Termii is to redefine communications and optimise it for Africans, and we’ve only begun to scratch the surface.”
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How the market affects Termii
It is anticipated that the revenue generated by the global market for CPaas will amount to $34.75 billion by the year 2026, expanding at a CAGR of 38%. Players such as Termii, Africa’s Talking, Beem, and SendChamp are currently dominating the market in Africa, which is still in the process of developing its structure. Africa’s Talking, which is based in Kenya and has raised more than $8.6 million so far, is now in the lead regarding fundraising. Gbolade, on the other hand, rejects the idea that there are any direct competitors.
According to him, “With this new play, we’ve been able to zoom past our regular competitive landscape. What we have now are fractional competitors—players across different sectors who are offering some parts of our one-stop-shop solution.”
Samantha Wulfson, an investor at Fintech Collective, stated the following in a news release: “In conversations we had with African businesses, Termii’s solution was cited as the fundamental piece of their infrastructure powering day-to-day business operations. Termii has been a game changer throughout the industry in ensuring the delivery of OTPs and transaction-related messages with a higher degree of certainty than ever before, and is still only scratching the surface of their vision as a communication layer.”
Gbolade noted that this “higher degree of certainty” is made possible by a proprietary internal technology called ICS, which can recognize signs of downtimes before they occur and shift traffic to alternative channels.
Termii expanded to Algeria and began operations thereafter, it completed a capital round in 2021. However, a stringent regulatory environment forced the firm to double down on other expansion zones, particularly francophone Africa, where it is currently further establishing its roots.
According to a portion of the press release, “With its recent fundraise, the company looks to further its expansion efforts, particularly in francophone Africa with a focus on Ivory Coast.”
The per-billing wallet approach that Termii uses is how the company makes its money. The wallet is prepaid by businesses, and funds are deducted from it whenever a customer of those businesses makes a call or sends a message. Because firms typically spend money on consumers before they are even onboarded, this model highlights the necessity of being efficient with the CPaas model.
This indicates that an unreliable communications provider would have to pay customer acquisition fees for clients who would cancel their service after their initial interaction with the company.
In order for Termii to increase its acceptance, they need to engage the technology ecosystem. The Termii Elevate programme is an annual event that the startup hosts to bring together developers, users, and stakeholders to drive conversations on the construction of high-quality communications solutions.
With Emmanuel Gbolade and Ayomide Awe, Termii’s technical creators, at the forefront of the company’s affairs, this move practically replicates the playbook of Paystack, the largest fintech company in Africa. However, in the words of the company’s chief executive officer, “Termii is on a unique path that will see it unlock innovation in Africa’s communications space. We are always thinking 10 steps ahead.”
