PIC CAPTION: Amin ben Abderrahman (centre), CEO and founder of Konnect Networks with his team from from left to right: Ikdem ben Mbarek, Bechir Ennaifer, Alaa Lassoued, Amin ben Abderrahman, Ghofrane Baaziz, Houda Bouali and Erij ben Brahim. This fast-growing, award-winning Tunisian fintech startup provides a fast and secure online payment solution to North Africa’s unbanked population. Image: Supplied / Konnect Networks
There are over 350 million unbanked people in Africa with many financially excluded from the economy simply because they don’t have a bank account. The rapid advent of customer-centric fintech solutions is changing lives in areas of the continent where cash is still king. Thanks to these innovative solutions, Africa’s status as a financial pariah is fast changing from an unbanked dark continent to that of an innovative fintech pioneer opening the door to wealth for its previously unbanked population and providing a blueprint for financial inclusion in developing and emerging economies.
While building a global fintech startup is no mean feat, it is certainly not impossible for those bold fintech pioneers determined to make a change and leave a legacy. Konnect Networks founder and CEO Amin ben Abderrahman is one such pioneer whose award-winning fintech startup is on its way to becoming North Africa’s premier payment facilitator solution, shares his fintech startup journey with AfricArena’s Jabulile Sonya Ngwenya.
As ben Abderrahman sits down with AfricArena to share his fintech startup story, he boldly declares that Konnect Networks has huge aspirations and “is aiming to become the Stripe of Tunisia and North Africa, with ambitions to target all the North African countries.”
A bold statement indeed. This ambitious goal is not far out of Konnect Networks’ reach as the team is on track to achieve this goal soon thanks to its dynamic ecosystem of merchants and freelancers across North Africa. This is a testament to the growth spurt Africa’s e-payments market is experiencing. A McKinsey report estimates that Africa’s domestic e-payments market is expected to reach around $40 billion by 2025.
What makes this spunky young fintech startup’s ascent remarkable is that under Ben Abderrahman’s astute fiscal stewardship and innovative leadership, combined with his deep understanding of the regulatory landscape, competitive dynamics and expertise, Konnect processed over $20 million in transactions within 20 months, coupled with an impressive 20% monthly growth rate.
Quite a remarkable achievement for this young North African fintech lion that has its eye on seizing a fair share of North Africa’s fintech and paytech market this year. This measurable growth, ben Abderrahman notes, reflects the startup’s robust market adoption and scalability. He reveals that Konnect Networks, headquartered in Tunisia is emerging as a formidable player in the North African fintech landscape. With its simple, fast and secure online payment solution to North Africa’s unbanked population, they are looking at strategically expanding from Tunisia into Morocco, Libya and Algeria this year.
This bold move will enable them to address the region’s burgeoning demand for digital payment solutions which, says ben Abderrahman, is in line with the company’s mission to “pioneer accessible financial services across North Africa, enhancing economic growth and financial inclusion.”
Ben Abderrahman, who has 12 years’ experience working in the corporate world as an expert on financial information systems for global companies under his belt tells AfricArena that Konnect Networks’ story started in Zurich, Switzerland. He pauses, recalling the moment. “The defining moment for realising the need for Konnect Networks in the market, especially in North Africa, occurred during a personal experience while I was living in Zurich,” Ben Abderrahman recounts.
“I wanted to transfer money to my cousin in North Africa, only to discover he was unbanked and lacked any digital app to receive money. The only solution was to send a bank wire to his mother, which seemed absurd for a 23-year-old in the modern digital age. This incident highlighted a stark gap in the market as despite there being 23 banks in Tunisia, none offered a straightforward digital solution for such basic financial transactions.”
As ben Abderrahman recalled this jaw-dropping moment, he says, “this gap between the potential of modern technology and the actual offerings of local banks was eye-opening. Initially, I thought about addressing the peer-to-peer (P2P) money transfer market. However, it soon became evident that there was a much larger demand from businesses for accessible digital payment solutions. This demand shift led to the pivot towards focusing on the B2B market, recognizing the immense need for businesses in North Africa to integrate digital payments seamlessly into their operations. Thus, Konnect Networks was born to bridge this gap and enable efficient, technology-driven financial transactions in the region.”
Konnect pitched on the AfricArena stage for the first time at the AfricArena Tunis Summit in 2023 and won the Best Seed Startup Award. A smile breaks out on ben Abderrahman’s face as he recalls how this moment catapulted Konnect into greater market visibility. “Winning the AfricArena Best Seed Startup Award really put Konnect Networks on the map within the Tunisian ecosystem,” Ben Abderrahman says. “It wasn’t just a trophy for us; it brought our team closer together and got us some serious attention back home. Plus, it scored us a trip to Cape Town, which was a game-changer. There, we got to hang out with other fintech folks, swapping stories and tips about our markets, which was super enlightening.”
He continues, “But the real kicker? We finally got to meet face-to-face with some investors we’d been chatting with for ages. Being there in person made all the difference, and it really sped up our fundraising efforts. So, all in all, winning at AfricArena wasn’t just a win for the moment; it set us up strong for the rest of 2023 and beyond, leading into a solid start for 2024.”
Ben Abderrahman thanks the AfricArena team for their interest in Konnect and for the way the team tirelessly supports Africa’s tech and investment ecosystem by organising the AfricArena competition and helping them to “create konnections.”
This startup’s audacious manoeuvres have attracted the attention of several industry giants within the fintech industry, most notably Visa, a renowned leader in digital payments. Not long after Konnect won at AfricArena, Visa invited Konnect to participate in the inaugural Visa Africa Fintech Accelerator cohort.
“Being part of the 23 startups selected for the inaugural Visa Africa Fintech Accelerator cohort is a significant accolade for Konnect Networks,” says ben Abderrahman. “It symbolises recognition from one of the global leaders in digital payments, highlighting Konnect's potential and innovation in the fintech sector. This participation not only validates the company's strategic direction and technological advancements but also positions Konnect Networks at the forefront of financial technology innovation in Africa.”
Ben Abderrahman pointed out how in addition to receiving unparalleled access to Visa’s extensive network and cutting edge technology, this association gives Konnect a unique opportunity to “innovate alongside Visa, exploring new technologies and payment solutions that could redefine the digital payments landscape in Africa. This collaboration may lead to the development of bespoke solutions that cater specifically to the needs of the African market.”
“Being part of this cohort allows Konnect to connect with other leading fintechs, financial institutions, and tech companies in the Visa network. These connections can lead to strategic partnerships, collaboration opportunities, and a broader network of influence, further propelling Konnect's growth and expansion across Africa and beyond.”
With years of experience in the financial services industry and witnessing first hand how “the shortcomings of traditional banking systems and the glaring gap in innovation within the financial sector” affected the unbanked, ben Abderrahman boldly made the leap from being a corporate ladder climber to fintech entrepreneur. He tells AfricArena his path from corporate into the startup world was a deliberate, well-thought out choice “fuelled by a passion for innovation and a relentless pursuit of creating meaningful change.”
The transition, he says, was not complicated as he “amassed the skills and knowledge necessary to navigate the complex landscape of paytech,” and financial security. Sharing a nugget of wisdom for people thinking about starting a business, he says: “Having diligently saved over the years, I had the financial security to take the leap into entrepreneurship and pursue my vision of revolutionising the payment ecosystem.” Ben Abderrahman counted the cost before setting sail into the thrilling, uncharted waters of fintech. “Witnessing the transformative potential of emerging technologies like blockchain and recognizing the untapped opportunities in the paytech space, I was inspired to found Konnect,” Ben Abderrahman tells AfricArena.
Describing how fintech in Africa is impacting the lives of people across the continent and the role Konnect plays, he says, “Fintech in Africa is transforming finance and banking by providing user-centric experiences that align with the real needs of the community. Unlike traditional banks, fintechs like Konnect have drastically improved the speed and ease of accessing financial services. For example, Konnect has reduced the time to access a payment gateway from three months to just 15 minutes, including KYC/KYB processes.” Impressive. This change, ben Abderrahman notes, has been a game changer, “empowering startups, entrepreneurs, and freelancers to manage their payments in a much more efficient way, enabling payments while selling on social media platforms from the sofa. Fintech's approach is making financial services more accessible and relevant to the daily lives of Africans”.
Passionate about his role as CEO and founder that enables him to capitalize on his unique skill set and “make a significant impact in the fintech and e-commerce sectors in North Africa and beyond,” ben Abderrahman says, “the ability to apply my expertise to drive innovation and efficiency in these areas is incredibly fulfilling. The diverse challenges inherent in these dynamic fields keep me constantly engaged and intellectually stimulated, there are no two days that are the same. Furthermore, as a CEO, the opportunity to interact with a wide variety of people, from regulatory and compliance officials to technical teams, marketing experts, and business development strategists is fun. Not always easy but definitely exciting.”
A typical day in ben Abderrahman’s day to day life sees him executing serious time management skills in answering emails, participating in meetings with his internal team, focusing on business development and engaging in sales conversations with clients and partners. Despite his busy schedule, he is a doting father. “I make sure to carve out quality time to play with my son, which is a cherished part of my day,” he says, gleaming with pride.
Briefly explaining the differences between fintech startups in North Africa and Sub-Saharan Africa, ben Abderrahman explains, “fintech startups in North Africa often integrate with established banking systems, reflecting the region's bank-centric financial landscape. Each country in North Africa operates under its own central bank, adding layers of regulatory complexity and making it more challenging for fintechs to navigate the market. Conversely, Sub-Saharan Africa's fintech ecosystem is primarily driven by mobile money, with telecom companies leading financial inclusion efforts. This sector bypasses traditional banking infrastructure, directly connecting consumers with financial services through mobile platforms.”
He adds, “in Sub-Saharan Africa, multiple countries might operate under a single central banking system, which can simplify regulatory navigation compared to North Africa’s country-specific central banks.”
“Despite the operational challenges in North Africa, such as stringent regulatory environments and the need to align with established banking practices, these hurdles are what invigorate entrepreneurs,” ben Abderrahman says. “They motivate us to innovate and adapt, turning obstacles into opportunities for growth and development in the fintech industry. The entrepreneurial journey in North Africa's fintech landscape, with its inherent difficulties, exemplifies the dynamic and resilient spirit needed to succeed in this evolving sector.”
An avid motorsport enthusiast, ben Abderrahman shares an interesting insight about the fintech sector, drawing an analogy between fintech and Formula 1: “Fintech, much like Formula 1, thrives on the collaboration of experts from diverse fields such as strategy, technology, finance, marketing, and competitive analysis. Each team member’s expertise contributes to the company’s success, similar to how each role in a Formula 1 team is crucial for winning races.” Collaboration is the name of the game for success in today’s world.
He elaborates further: “In fintech, strategists navigate market trends, technical teams build secure and efficient platforms, finance experts manage funding and investments, while marketers build the brand and engage customers. Just as a Formula 1 driver needs to master the track, fintech leaders must adeptly navigate the financial landscape, ensuring the company stays ahead in the race against competitors. This synergy and pursuit of innovation underline the dynamic nature of fintech, highlighting its transformative impact on financial services.”
When challenges hit a startup team, it is easy to become demotivated, but Konnect Networks could not afford to lose steam during the arduous funding winter. “During the funding winter, when money was tight for everyone in the startup world, we at Konnect Networks had to get creative. Raising funds was tough, but it pushed us to really look at our costs and figure out how to make every penny count. We doubled down on getting our unit economics right, focusing on slashing costs wherever we could. We automated a lot of our processes, like reconciling accounts and detecting fraud, and got smarter about handling support requests to save on expenses.”
It’s hard to believe that the highest amount Konnect has raised to date is $300,000 because their strategic allocation of funds has enabled it to reach all their milestones, including procuring their payment facilitator licence from the Central Bank of Tunisia. This licence set the groundwork for Konnect to pave the way as a leader in creating legal frameworks that have increased their monthly profitability and continues to attract the interest of major players, merchants, and partners within the industry.
Konnect’s lean budget approach helped them to consolidate its position in Tunisia, have a dedicated product innovation and infrastructure support budget, reinforce and grow the team and earmark a significant portion of funds for expansion into new markets with a primary focus on Morocco, and future growth in Algeria and Tunisia.
“This wasn't just about cutting costs; it was about building a lean, efficient operation,” ben Abderrahman emphasises. “And guess what? It worked. By February this year, we hit our break-even point, a big win for us. It showed that even in tough times, focusing on the basics and making sure we’re running as efficiently as possible can really pay off. So, while the funding winter was a challenging time, it also taught us valuable lessons about staying focused and lean.”
Reflecting on the years since launch, ben Abderrahman shares the best advice a mentor gave him that helped him shift his focus from seeing technology as the key differentiator for success to seeing the bigger picture. A mentor he shares, told him, "In reality, no one cares about the technology itself, whether the database is centralised or decentralised, no one cares. What's most important is the impact, a sustainable impact."
Abderrahman admits he didn’t fully grasp this insight for the first two years as he prioritised technology until he had an aha moment that “technology is merely a tool and the most crucial aspect is what this tool is used for in terms of business and impact. This advice reshaped my approach to entrepreneurship, emphasising the importance of focusing on the sustainable impact our solutions can create rather than the technology itself.”
One pivotal factor that helped Konnect successfully expand its business operations was a strategic, focused approach to maximising their online visibility through effective engagement with various market segments within Tunisia and North Africa.
“Our online marketing efforts, particularly in SEO, positioned us prominently in payment-related search results,” ben Abderrahman says. “The integration of our payment solutions within marketplaces significantly contributed to our transaction volume. We methodically targeted market segments, starting with the agile and rapidly evolving startups and SMEs, before approaching larger corporations with higher transaction demands. Subsequently, we expanded our reach to micro-enterprises and freelancers, offering them tailored digital payment solutions. This systematic market penetration facilitated our growth and enhanced our brand recognition across different customer demographics.”
Building a fintech startup is not for the weak or faint of heart. Ben Abderrahman strongly advises founders looking to build a fintech startup that a solid technical foundation is crucial for success, and they need to be “driven by a strong motivation and ideally be supported by active investors with experience in finance or regulation as the fintech landscape is complex and often ahead of current regulatory frameworks, so founders must be resilient and prepared to navigate a space where regulations may still be evolving.” He adds, “this journey requires a willingness to take calculated risks, as pioneering in an area with developing regulation is both necessary and challenging.”
Ideally, founders should “either come from a technical background or ensure they have a co-founder who is technically adept for the success of a fintech venture relies heavily on the ability to innovate and implement robust technological solutions. This technical prowess is essential not just for product development but also for meeting stringent regulatory and compliance standards.”
Konnect Networks is helping consumers identify and fight financial fraud as it is “dedicated to striking a balance between stringent risk assessment and a streamlined onboarding process,” ben Abderrahman points out. “In the fintech sector, where compliance and risk management are paramount, particularly in the wake of increased regulatory scrutiny post-2008, we recognize the importance of efficient yet comprehensive risk protocols. Our approach focuses on automating the risk assessment during the KYC (Know Your Customer) and KYB (Know Your Business) processes to ensure thorough vetting without complicating the onboarding experience.”
Excited about how Konnect is shaping policy in Tunisia, ben Abderrahman says, “the new legal framework for payment facilitators in Tunisia exemplifies our commitment to leading by example in regulatory compliance and risk management. This involvement not only aligns with our mission to ensure financial security and transparency but also demonstrates our capability to innovate within the regulatory confines. By optimising our processes, Konnect Networks ensures that our compliance measures are robust, yet user-friendly, enabling quick and secure onboarding without sacrificing the thoroughness required for effective risk management.”
Watch out for this young North African fintech lion flexing its muscles as it prepares to leap forward into Africa’s digital era, spearheading North Africa’s financial prowess through turning the unbanked into banked, financially literate consumers.
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