Zambia’s Union54 Raises $12 Million In A Seed Extension Round Led By Tiger Global To Scale Its Card Issuing Business

Union54, a Zambia-based card issuing fintech startup has secured $12 million in a seed extension round led by serial investor Tiger Global. The extension round also witnessed the participation of other investors namely – Earl Grey Capital and Not Boring Capital who are new investors as well as former backer Vibe VC.

The seed extension round follows an initial seed round that took place back in October and saw the fintech startup raise $3 million from Tiger Global who led the round and other investors such as Runa Capital, Ace and Company, Todd & Rahul Angel Fund, and Vibe VC and angel investors Babs Ogundeyi, the Chief Executive Officer of Nigerian neobank Kuda, Risana Zitha, Managing Director of Renaissance capital, and Gbenga Ajayi, former director of SMB Growth at Wise.

Union54 provides an application programming interface (API) to issue debit cards without needing a bank or a third-party processor. From anywhere in Africa, customers, employees, stakeholders, or just about anyone, can issue and manage their debit cards. The startup was founded in 2021 by Perseus Mlambo and Alessandra Martini and is a spinoff of their previous company, Zazu, a challenger bank they launched back in 2015.

The idea for Union54 emerged from the challenges these founders faced while running Zazu – they faced the challenge of issuing cards to their customers. Today, Union54 provides card issuing services to other fintech startups.

The startup says it has seen impressive growth since it started and has issued more than 500,000 debit cards to its users as well as processed transaction volumes worth millions of dollars. While the startup’s CEO Perseus Mlambo mentioned that the startup only had revenue of about $3,000 in the first month of launching, the following month this increased by 600 percent and has continued to grow 50 percent month-on-month. “What this is telling us is that there’s very much real interest in the number of people who want to have debit cards and this is not going to stop anytime soon,” he said adding that “What’s more, our interactions with customers and potential customers have shown us that the real problem we are tackling isn’t the ease of issuing cards– rather, it’s much broader than we could have imagined.”

According to Chief Executive Perseus Mlambo, over 50 companies are currently in Union54’s API sandbox environment, ranging from digital banks to post-Series A fintech startups and “companies founded on the basis of Union54’s availability.” He also said that the startup is serving customers in various African countries without providing an exact number.

Union54 hopes to become and/or create a local alternative to Mastercard and Visa by proving card settlement features and cards for merchants. Explaining the importance of creating another card network, the startup’s CEO explained that “The purpose of creating another card network is an inspiration of what’s happening right now. Number one, we’re vulnerable and hostage to any political decisions that might affect trade on the continent. And if anything were to happen, we would wake up and would not have access to our funds,” while referring to Mastercard and Visa pulling out of Russia in the wake of the Russia-Ukraine conflict.

“Number two, when you think about the card networks today, they’re not fit for African merchants because settlement is often taking three days for a local debit card, maybe it’s taking over seven days for an international debit card. There’s a significant opportunity as the world realigns itself; we need to get to a point where we’ve got a payments route that needs to be developed locally for local use,” he added.

The startup will use the newly-acquired funds to push its card scheme across Africa.