Scale, a South African FinTech startup, has raised $700,000 in pre-seed funding to support its card-issuing orchestration platform. The platform streamlines the process for FinTechs to issue cards by connecting them with banks, issuer processors, KYC providers, and payment networks.
Scale’s pre-seed funding round was led by 54 Collective, a sector-agnostic venture capital firm, and First Circle Capital. Sunny Side Venture Partners and other angel investors also contributed to the round.
The one-year-old South African startup founded by Barbara Woollams and Miranda Perumal (a former director at Visa) plans to use the funds to expand its API product to Kenya, Zambia, and Côte d’Ivoire.
Scale’s pre-seed funding round is timely, as many African FinTechs are re-evaluating card services because of the high costs of multi-layered payment processing partnerships. Scale claims its product can offer a more cost-effective solution for card issuance.
With the backing of our esteemed investors and partners, we are well-positioned to expedite our ecosystem engagement, build trust with African businesses and continue to strongly focus on solving major pain points when enabling card rails by delivering unrivalled, world-class service.
MIranda Perumal, founder & CEO of Scale
One of the significant problems in the card payment industry is “Chargeback fraud”. In 2022, African FinTechs such as Eversend and Busha temporarily reduced their card operations. They switched providers after Union54, a Zambian FinTech, discontinued its card services because of a 600% increase in attempted chargeback fraud on its platform.
Scale’s decision to expand into Côte d’Ivoire is well-founded, considering the country’s leading position in card issuance within West Africa. Ivorian banks issued around 2.4 million cards to customers in 2022.
Although cash remains a dominant payment method in some African markets, Scale is confident in the growth prospects of its card issuance service within the continent’s expanding FinTech market, valued at $230 billion by 2025. By 2029, projections indicate that card issuance platforms will be responsible for issuing approximately 35% of all cards used in payments.
The Scale team, led by a rockstar female founder [with] deep sector expertise and proven bias toward action truly excites us, and we look forward to seeing Scale become a critical enabler for FinTechs.
Hetal Patel, Chief investment officer at 54 Collective
Scale will face competition from B2B card issuers like Onafriq in the African market.
