January 30, 2013
Interviewed by: David Snow
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Deal Story: Pagatech

Tokunboh Ishmael talks to Privcap about Pagatech, a company that delivers financial services in Africa.

Tokunboh Ishmael talks to Privcap about Pagatech, a company that delivers financial services in Africa.

Tokunboh Ishmael, Alitheia Capital: We invest in financial services, particularly where they’re looking to serve the underserved. That’s the sector that we invest in traditional bricks the mortar entities. But with the mobile payment space, we realized that we suddenly could reach further geographies.

Many of the people that we think about and lives that we think about uplifting, many of those people also live in the rural areas. How do you begin to reach those places? And especially where some of the more traditional bricks and mortars cannot reach. So with the mobile payments, they are thinking we could have a far better reach.

Then also, if you think about the fact that with financial inclusion in our markets, access to finance, say that 60% of the market do not have access to financial services. They’re unbanked. But with mobile penetration, you’re looking at nearly 90% over in some areas. And if you think that if everybody has a phone, then everybody has the option to be served.

Not just for financial services, because what we’re finding is that it will go beyond financial services. So that’s one that really excites us. The reach, the impacts that we can have. Not just from a financial perspective, because it will make money, but also in terms of its reach. And the entrepreneur said what he wanted to do, and I thought, well, I’m looking at financial services. Pure financial services.

We kept on having discussions, and I was excited about what he was doing, because I’d also worked in Silicon Valley with an online wallet back in the early 2000s. And I saw this as something comparable, it’s now a mobile wallet. I was interested, and I had a few suggestions to make.

The more we spoke about it, the more I was like, actually, if mobile penetration is this high, and the people that have the mobile phones, we want to reach them with financial services, this is a good way to reach them. And so that’s how we went forth on that transaction. But it was first of all through a personal relationship, as these things are.

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