Grace Ashiru
Zone, a Nigerian blockchain startup aiding banks and fintechs in payment processing, has secured $8.5 million in its first venture capital funding round since transitioning into an independent entity in 2022. Previously integrated within its parent company Appzone, Zone attracted investment from Flourish Ventures and TLcom Capital, leading the seed round. Noteworthy backers include Digital Currency Group, Verod-Kepple Africa Ventures, and Alter Global, reflecting a mix of international blockchain-focused VC firms. Obi Emetarom, CEO and co-founder of Zone, explained the necessity of raising funds post-separation from the parent company as a means to sustain and advance growth during a conversation with TechCabal.
Zone, Africa’s pioneering regulated blockchain network for payments, is poised for expansion following a significant funding infusion. The company intends to broaden its domestic network coverage and forge connections with additional banks and financial services entities. Operating a blockchain infrastructure facilitating direct transaction flows between financial service providers sans intermediaries, Zone streamlines settlement, reconciliation, and dispute resolution processes.
Boasting a clientele comprising over 15 of Africa’s premier banks and fintech firms, Zone’s network is integral to processing payments across the continent. Notable clients include Access Bank Plc, Guaranty Trust Bank Plc, and United Bank of Africa—three Nigerian banking giants boasting market capitalizations of at least ₦1 trillion.
Expressing optimism about Zone’s potential to catalyze payment innovation globally, Ameya Upadhyay, Partner at Flourish Ventures, lauds the company’s technology and envisions its replication across borders.
Zone aims to enhance its technology, particularly focusing on enabling instant settlements, while also diversifying its blockchain network’s utility beyond ATMs to broaden its user base.
“Emeratom emphasized that their focus lies not on developing interfaces for end users, but rather on crafting an API tailored for seamless integration by banks, fintech firms, and other players in the financial services sector.
Zone’s recent funding injection arrives amidst a challenging fundraising landscape, with African startups securing a mere $3.2 billion in 2023—the lowest tally in three years according to TechCabal’s funding tracker. “Despite the funding constraints, we attracted high-caliber investors, with more interest than we required, which underscores the confidence in the Zone brand,” Emetarom remarked.
He highlighted Zone’s appeal to investors, citing the distinctive nature of its product and the extensive industry experience boasted by its founders. “While customer-facing payment startups abound, our focus on building payment infrastructure sets us apart, making us truly unique.”
Zone aims to expand its blockchain network throughout Africa, utilizing a portion of the recently acquired funding to execute an extensive pilot program, assessing its cross-border functionalities in preparation for the launch of a remittance product in 2025. Despite its ambitions, Zone is prioritizing the enhancement of domestic technological capabilities and the development of use cases before pursuing expansion into new markets.
