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BitMama acquires Payday after the fintech company secured a $3 million in seed funding last February


After raising $ 3 million in a seed-funding round last February, fintech startup Payday is set to be acquired by BitMama, Inc., a blockchain payments platform. This is, indeed, a massive payday for Payday owners and staff.

Payday is a fintech startup that allows Africans to receive payments via its virtual euro, pound, and United States dollar bank accounts. The company had raised a $3 million seed round in February 2023, but it faced challenges in scaling its operations. BitMama, on the other hand, is a leading crypto exchange in Nigeria, and it has expanded its focus to include other financial services such as remittance.

According to Crunchbase, the leading website on startups, Payday had 13 investors, and 4 partner investors. The lead investor during the seed round was Moniepoint, a financial technology company that renders payments, credit business management, and banking services for businesses.

The acquisition of Payday would allow BitMama to expand its product offerings and reach a wider customer base. The acquisition is intended to strengthen BitMama’s cross-border payments service. In fact, the acquisition involves BitMama taking over Payday’s customer deposits and liabilities. Changera, which is the cross-border payments product of BitMama, will also absorb some of Payday’s key personnel from various departments, including marketing, customer service, and engineering. BitMama is offering Payday investors $1 million in equity, valuing the company at $30 million.

The type of acquisition that is taking place between BitMama and Payday is a horizontal acquisition. It is an acquisition strategy where one company acquires another company that operates in the same industry and at the same stage of production-supply chain. While BitMama is a crypto startup and Payday is a fintech startup, they both sell the same product, which is financial services electronically. Such an acquisition seeks to access new market sectors, reduce costs through economies of scale, and more importantly, increasing its customer base, which would logically lead to greater revenue.

The other primary benefit is improved distribution, specifically if the merged companies maintain established customer bases in different geographical locations. Broadening the range of territories that can be covered often leads to new marketing and revenue opportunities, as well as increasing the likelihood that new consumers will be drawn in.

A horizontal acquisition also reduces competition and helps to increase market share. While not all horizontal mergers are conducted between competing companies, because the nature of the acquisition means that the companies operate in the same general market space, competition is almost always present and is at least reduced when the two or more companies combine.

Following this acquisition, we should expect BitMama to considerably expand its market share in the fintech industry.

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