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Stitch raises $25M Series A extension led by Ribbit Capital, increasing the round’s total to $46M

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Open banking, in which traditional banks release their data via application programming interfaces (APIs) to enable the development of new financial services for their consumers, has been one of the most significant disruptions in global payments over the past decade. Less than five years ago, this innovation, in which businesses use APIs to access customers’ financial accounts and provide an array of integrated and embedded financial services, took on in Africa.

In the latest development, South African fintech Stitch, which has built an “end-to-end payments solution designed to meet the complex and evolving payments needs for its enterprise clients,” is announcing some funding to become a market leader in this payments segment.

Stitch focuses on enabling businesses to build, optimize, and scale financial products and providing API gateways to improve the conversion for online payments and optimize payment operations for its clients. The Cape Town fintech has raised $25 million in an extension round of funding led by global fintech investor Ribbit Capital, bringing Stitch’s total Series A to $46 million. Existing backers, including CRE Ventures, PayPal Ventures and the Raba Partnership, participated in the round.

This is Ribbit Capital’s third investment in Africa after leading Chipper Cash’s $30 million Series B and Wave’s $200 million Series A. Co-founder and CEO Kiaan Pillay said the team has been fortunate to have prominent local and international backers in its corner since it came out of stealth in 2021. Its earlier investors bought into the narrative that its team, targeting a vast market opportunity, could build and scale products that create value in a fledging fintech category. But as it enters the growth stage, having healthy growth numbers matters more, especially in this current venture capital slowdown.

Pillay acknowledging this, stated that the serendipitous alignment of strong traction and preexisting ties was critical in landing its lead investor and closing the round. “It was a good happenstance that we finally started to find traction in a world where hard numbers are significant for investors like Ribbit, whose team we’ve known for a while,” noted the CEO, adding that Ribbit Capital’s strong understanding of the global fintech landscape and emerging markets will be invaluable to Stitch which is on track to process over 50 million transactions, totaling $2 billion in total payment volume (TPV) this year.

These figures are across seven product features Stitch has launched since early 2022. Stitch was a quasi-data, quasi-bank-to-bank payments platform before embarking on a feature release spree. Its clients, ranging from enterprises to entrepreneurs, could use its platform to access customers’ financial accounts and innovate around providing services such as personal finance, lending, insurance, payments and wealth management.

Now it has evolved into a full payment service provider. Customers can accept payments via pay by bank, debit and credit card, recurring debits, cash and manual bank transfer; manage, orchestrate and reconcile payments across multiple methods, providers and geographies in one dashboard with PayOS; and disburse funds via payouts. Several use cases include e-commerce checkouts, finance operations, financial services, lending and insurance, marketplaces and recurring payments.

Stitch says its end-to-end payment solutions is primarily offered to enterprise businesses in South Africa. MTN, Multichoice, the Foschini Group (TFG), Standard Bank’s SnapScan and Yoco are a few names. However, it still has a handful of startups and small businesses as customers in Nigeria and other African countries where it has licenses to operate, Pillay said in the interview. The fintech, whose competitors include Mono, Okra, Revio, and MoneyHash, also serves global PSP partners and is in talks to do the same with a few global consumer internet companies.

“We moved away from being a single method platform to a next-generation PSP for local and global enterprises,” said the CEO who founded Stitch with Natalie Cuthbert and Priyen Pillay. “Initially, we just had a pay-in feature where we support bank and card payments. While we’ve added more, we now have an orchestration layer, which many enterprises use to manage payment methods and reconcile across different banks. And we do payouts, whether a disbursement, a refund, or a withdrawal. Our solution is attractive for global companies trying to enter the market for the first time because of the end-to-end process.”

From the point of view of these consumer internet companies in the U.S. or Europe, South Africa is often seen as the gateway to Africa. Unlike other African markets, the country has a functional credit card system, which makes card integration straightforward. However, it’s still essential that these outfits consider other payment options in an African market where cards aren’t prevalent, which is where Stitch comes in. According to Pillay, the demands of local enterprise clients pushed the company to develop these product features, which he believes can be tailored to the needs of global clients, within the past year,

“I don’t think large enterprises only use us for a single method. I think one of the coolest metrics for us is within the first three months of going live with a large enterprise, we’ve seen almost every single one adopt a second or a third product because we can incrementally add things in a very modular way,” he said. “We’re sort of playing in a space that we wouldn’t have expected to, but because big merchants have demanded us to have more products, it’s been an easier place to get into and scale from there.”

Stitch, which emerged from stealth in 2021, claims its platform offers customers better reliability, higher uptime, and quicker problem resolution by utilizing direct connections with banks and networks and removing intermediaries. In addition to its open banking features, Stitch provides client support, including localized insights into the payments landscape and custom-built, co-created solutions tailored towards removing the complexities of sending, receiving and managing funds. Its subsidiary, WigWag, enables small businesses and micro-influencers who sell goods and services on social media platforms to accept payment via a link and card.

The fintech has now raised $52 million in venture capital (including a $6 million seed). The company, which has over 80 employees, plans to use its Series A money to continue developing its platform, expanding its customer base, and seizing opportunities to serve new markets, Pillay expressed on the call.

“Everything we do is client-focused. We’ll continue to optimize for what they have. And then scale geographically with them and deeper in products they already have,” added the CEO. “We also want to continue adding as many first-party payment methods as possible. Our value proposition has been precision engineering and deep infrastructure, so, for instance, we are looking at connecting to card and bank rails without intermediating. Things like this are often slow and capital intensive; that’s why we raised.”



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India’s Private Rocket ‘Agnibaan’ Set For Launch By Agnikul Cosmos On May 28

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Another private Indian rocket is launching on May 28. Agnikul Cosmos will attempt to launch the ‘Agnibaan’ for the second time tomorrow at an expected time of between 5:30 to 7:30 am IST, India Today reported.

The Chennai-based space startup has also issued a Notice to Airmen (Notam) information to aware the authorities about the potential launch to avoid hazards.

According to Agnikul, the Notam will be active till June 5 for the launch which will take place from the company’s spaceport ALP-01 at Satish Dhawan Space Center in Sriharikota. This spaceport, which is India’s first private one, was inaugurated by ISRO Chairman S Somanath on November 25, 2023.

This would mark the second mission with a commercial launch vehicle. India’s first private rocket Vikram-S flew on November 18, 2022 during Skyroot Aerospace’s Prarambh mission.

ALSO SEE: India Gets Its First Private Launch Pad, And It Will Give Space Sector A Major Boost; Here’s How

What is Agnikul’s mission about?

Agnikul’s mission named SubOrbital Technological Demonstrator or SOrTeD is meant to test the single-stage Agnibaan rocket.

According to Agnikul’s website, the rocket to be used for SOrTeD will be powered by the Agnilet semi-cryogenic engine that uses kerosene and liquid oxygen. This single piece engine is entirely 3D printed and would be the first such power source used in a private rocket launch.

“Unlike traditional sounding rockets that launch from guide rails, Agnibaan SOrTeD will lift off vertically and follow a predetermined trajectory while performing a precisely orchestrated set of manoeuvres during flight,” Agnikul said in its mission profile.

ALSO SEE: Indian Tech Startup To Create World’s First 3D-Printed Rocket Engine; All You Need To Know

Agnikul is developing Agnibaan as a two-stage rocket which can be customised according to the customer’s needs. This two-stage rocket which measures 18 meters tall has a maximum payload capacity of 100 kg to a 700 km orbit and can be customised to add a ‘baby’ stage.

The mission was initially planned for launch on April 7 but was called off about two minutes before the lift off due to a communication issue between onboard hardware.

(Image: Agnikul Cosmos)





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Five Asteroids In 3 Days! A Barrage Of Space Rocks Are Heading Toward Earth This Week

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Five asteroids of varying sizes are set for a close encounter with Earth in the next two days. NASA’s Center For Near-Earth Object Studies (CNEOS) has revealed that the smallest of them measures between roughly 4.5 to 10 meters in diameter whereas the biggest of them is about 32 to 73 meters.

The data has revealed that the smallest – 2008 LD – will be approximately 29.5 lakh km from Earth at the time of the fly by. It is travelling at a speed more than 16,000 km per hour.

Orbit of asteroid 2024 JV17. Image: NASA

The biggest of the five – the 2024 JV17 – will be approximately 66 lakh km away at the time of the closest approach while travelling at over 30,000 km per hour. Both these space rocks will fly past Earth on May 28.

ALSO SEE: Like Dinosaurs, Humans Will Become Extinct If A Single Asteroid Collides; ‘Asteroid Rush’ Trailer Proves Just That

The other asteroids – the 2021 LV (between 7-15 meters wide) and 2024 JG (between 22-50 meters) will get close to our planet on May 29.

Orbit of asteroid JO16. Image: NASA

There will be a close encounter today as well when the asteroid 2024 JO16 flies past Earth. According to the CNEOS data, it will be about 30 lakh km from our planet and will be travelling at more than 30,000 km per hour.

As the data suggests, there is no need to worry since the asteroids will fly from a safe distance from our planet. Besides, their size except for a few relatively big ones is also not a cause for concern.

ALSO SEE: Lack Of Earth’s Resources Can Be Fulfilled By Asteroids – And A US Firm Wants To Mine Them

(Image: Unsplash)



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Paytm warns of job cuts as losses swell after RBI clampdown

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Indian digital payments platform Paytm warned of job cuts on Wednesday after reporting that its net loss widened in the fourth quarter as it grapples with a recent regulatory clampdown.

One97 Communications, Paytm’s parent, said it expects to cut employee expenses and pare down its annual staff costs by $48 million to $60 million.

The company, once the most valuable Indian startup, reported a net loss of $66.1 million in the fourth quarter ended March 2024, compared to a loss of $20.11 million a year earlier. Revenue declined about 3% to $272.4 million from $280.4 million in the same period.

India’s central bank in February banned the company’s banking partner and sister company, Paytm Payments Bank, from conducting banking activity from March. That brought a sudden halt to Paytm’s slew of banking services, and the company was forced to ink new partnerships with other banks to keep many of those services running.

Paytm said it also took an impairment charge of $27.2 million related to its investment in Paytm Payments Bank in the quarter. In the quarter ending June this year, Paytm projected its revenue to be in the range of $180 million to $192 million.

In the full year ended March, Paytm’s revenue increased 25% to $1.19 billion from a year earlier, though higher payment processing charges, marketing costs, employee benefits charges and software cloud expenses weighed on its bottom line. As a result, net loss widened to $170 million from a loss of $213 million a year earlier.

Paytm’s results include “enough data points to suggest that the business is past the bottom in terms of payment volumes and user/merchant traction,” Bernstein analysts said in a note to clients. “Though from a financial metrics perspective, 1QFY25 is likely to be the bottom, as it would reflect the full impact of the lower steady state (vs. 2 months impact in 4QFY24).”

The analysts, however, cautioned that Paytm’s payment GMV has dropped by about 20% and the company’s expectations for its payment processing margin has also declined, which together “translates to a near 50% blow to the payment margins.” They estimated, however, that Paytm’s merchant lending volumes picked up in March and April — a clear sign of revival.

Paytm had about $1.03 billion in the bank as of March 31. The company’s shares were down about 1% on Wednesday afternoon to ₹349.20, giving it a market cap of $2.64 billion. Paytm went public in 2021 at a valuation of $20 billion.

“I am happy to share that we have successfully transitioned our core payment business from PPBL to other partner banks. This move de-risks our business model and also opens up new opportunities for long-term monetization, given our platform’s strength around customer and merchant engagement,” said Paytm’s founder and CEO, Vijay Shekhar Sharma, in the company’s annual shareholder letter.

“It has been possible in such a short period of time with extensive support from the Regulator, NPCI, Bank partners and our committed team mates. The unwavering commitment of our government and regulator to support innovation and financial inclusion, keeps us true to our mission and committed to our long-term sustainable growth opportunity,” he added.



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