If things were up to Termii, a pan-African communication platform-as-a-service (CPaaS) startup, digital communication in Africa would be decades ahead, in terms of innovation. The YC-backed startup has the goal of reimagining communication between African businesses and their users—and it has just raised $3.65 million to achieve this. Coming off the back of a $1.4 million seed funding in January 2021, Termii’s latest capital raise—led by Africa-focused VC firm Ventures Platform—signifies investors’ confidence in the under-funded CPaaS sector. “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,“ said Gbolade Emmanuel, the company’s CEO.
The round welcomed participation from other investors including Fintech Collective, Launch Africa Ventures, Nama Ventures, Aidi Ventures, Ralicap Ventures, Now Venture Partners, Vastly Valuable Ventures, NOA Capital, Assembly Investors, Probability Ventures, Adamantium Fund, MyAsia VC, Uncovered Fund, and Afropreneur Angel Group. Angel investors such as Aubrey Hruby of Tofino Capital and Eamon Jubbawy of Onifido also wrote their way into Termii’s cap table.
Founded in 2017 as a messaging product that allowed businesses to communicate with their users across multiple platforms, Termii has evolved its product suite to function as a one-stop shop that powers interaction between businesses and their users. If you’ve ever waited for an OTP text message when trying to make payment through a fintech gateway—such as Paystack’s—then chances are that you’ve experienced Termii in operation. Termii’s infrastructure powers the fast and secure messaging that allows users to interact with about 9,000 fintechs, including Moniepoint, Chipper Cash, and Piggyvest. Gbolade believes his startup’s function in the day-to-day activities of African fintechs is a prime advantage that is of interest to investors—such as Fintech Collective, the global fintech-focused VC firm that participated in the round. Termii claims its list of over 10,000 clients is filled up by businesses across several sectors, including logistics and healthtech.
According to Gbolade, one of Termii’s propositions that won investors over was Termii Go, the company’s latest product which he described as a “game-changing unified communications app”. Set to be publicly launched this month, Termii Go is a step up from Termii’s usual stealth infrastructure operations. The app aggregates Termii’s extensive network of clients across Africa into the platform, enabling swift, real-time, engagements between businesses and users. For businesses, this combines a CRM tool with a mobile comms infrastructure.
Termii Go also innovates over the usual text messaging that could be intercepted or accessed by rogue players, ensuring that sensitive information is not compromised even when a device gets lost or stolen. Through partnerships with phone manufacturers like Tecno and Infinix, the product is able to bypass third-party messaging gateways and ensure more instantaneous delivery of messages. Perhaps, the most exciting thing about Termii Go is that it plugs into existing mobile virtual operators to enable users to make and receive calls or access the internet through a globally responsive electronic SIM card. This bit remains a B2B play, expanding the scope and affordability of communication between teams.
Speaking about the product over a call with TechCabal, Gbolade said, “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.”
Revenue in the global CPaas market is projected to reach $34.75 billion by 2026, growing at a CAGR of 38%. In Africa, the market is still taking shape, dominated by players such as Termii, Africa’s Talking, Beem, and SendChamp. In terms of funding, Kenya’s Africa’s Talking takes the lead with over $8.6 million raised to date. But Gbolade dismisses the notion of having direct competitors. “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,” he said.
In a press release sent to TechCabal, Samantha Wulfson, an investor at Fintech Collective, said: “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 told TechCabal that this “higher degree of certainty” is made possible through a proprietary internal technology called ICS, which works intelligently to detect downtimes before they occur and direct traffic to alternative routes.
Following its capital raise in 2021, Termii expanded to Algeria and launched operations there, but a tight regulatory environment forced the company to double down on other expansion zones, especially francophone Africa, where it is now deepening its roots. “With its recent fundraise, the company looks to further its expansion efforts, particularly in francophone Africa with a focus on Ivory Coast,“ the release reads in part.
To make money, Termii operates a per-billing wallet system. Businesses preload the wallet which gets debited as calls and messages are sent to their customers. This model underscores the need for efficiency with the CPaas model, as businesses generally spend on customers before they’re onboarded. This means that an unreliable communications provider would incur customer acquisition costs for customers that could churn at their first contact with the business.
For Termii, growing their adoption also means engaging the tech ecosystem. With its annual Termii Elevate programme, the startup brings developers, users, and stakeholders together to drive conversations on building world-class communications solutions. With technical founders—Emmanuel Gbolade and Ayomide Awe at the helm of Termii affairs, this move almost mirrors the playbook of Africa’s fintech giant, Paystack. But according to the CEO, “Termii is on a unique path that will see it unlock innovation in Africa’s communications space. We are always thinking 10 steps ahead.”