The Y Combinator-backed neobank Djamo raises $17 million and reaches one million users in Francophone Africa.

Djamo has positioned itself as one of the digital banking startups aimed at serving the underserved population in Africa, focusing on the francophone west of the continent, specifically in Côte d'Ivoire and Senegal. Unlike other companies that concentrate on larger markets like Nigeria or Egypt, Djamo has successfully captured a unique niche and currently has over one million users in both countries. Recently, this fintech backed by Y Combinator raised $17 million with the goal of expanding its product range for both individual customers and small businesses that it has incorporated over the past two years. This funding round is the largest ever obtained by a startup in Côte d'Ivoire, exceeding the $14 million raised in its first Series A round in 2022, reflecting investors' confidence in its mission to make banking services accessible and affordable.

The company was founded in 2020 by Hassan Bourgi and Régis Bamba, with the intention of closing the financial access gap in French-speaking countries, where a considerable number of adults do not have bank accounts. In the region, traditional banks typically serve wealthy clients, leaving the majority of the population reliant on payment methods such as mobile money. The latter has been key in improving financial access across Africa, with 28% of adults in sub-Saharan Africa having mobile money accounts according to World Bank data.

However, despite this progress, the offering of mobile money services has been limited to basic transactions, which does not allow users to access more complex financial tools. Djamo positions itself between mobile money and traditional banking, offering the convenience of mobile money with the financial depth of a bank account. The startup primarily targets a growing segment of young users who have moved beyond the limitations of digital wallets but still find traditional banking institutions costly and outdated.

Since the last update on Djamo, the fintech has diversified its services beyond cards and P2P transfers, incorporating savings deposits, investment products, and salary-linked bank accounts, which it considers crucial for increasing customer engagement. Although many users use Djamo as a secondary account, greater potential lies in those without a bank account, who make up over 55% of its user base and use the app as their primary financial service.

To reach a larger number of these customers, the company has adopted a hybrid model, combining its app with offline agents who facilitate in-person transactions, similar to the model used by mobile money across the continent. Currently, around 5-10% of Djamo users receive their salaries through the app, and the company aims to increase this figure.

Moreover, Djamo is expanding its services for small businesses, offering tools to facilitate payments and management. The company has seen a fivefold increase in its revenue since 2022 and has processed over $4.5 billion in transactions since its inception. With its recent expansion into Senegal, a market dominated by Wave, Djamo aims to complement existing services by providing a digital banking experience that includes savings, investments, and access to credit.

With a team of 250 people, the fintech hopes that its new funding round will help it scale its services in francophone Africa. The support from investors like Janngo Capital, which led this round, highlights the importance of Djamo's mission in a region where less than 25% of adults have access to formal financial services, and where women face a higher risk of exclusion. The inclusion of women among its users represents a step towards reducing the gender gap and unlocking economic opportunities.