Businesses lose billions of dollars in revenue each year due to poor payment interactions. When payments fail, companies have few options to collect the funds – and even fewer options to prevent payment failures before they happen. This results in lost revenue, an operational nightmare, and a lousy customer experience.

I’m excited to be joining Revio, an African fintech that helps businesses collect more revenue through better customer interactions. Joining from a venture capital role, I wrote a ‘deal memo’ as part of my decision-making process. Here I share a glimpse into my analysis and why I’m bullish about the business – despite the risk, despite the down market.

The market opportunity

Emerging markets have a payments problem. In Africa, 2-3 of every 10 payments fail, compared to the 0.7 global average. Reasons for this include higher dispute rates, invalid or expired card details, multiple or dormant accounts, and insufficient funds.

This problem is big, and it’s growing. Digital payments are growing at 20%+ year-on-year, projected to reach $116 billion in transaction value in 2022, with more than 520 million digital buyers by 2025. In some markets, the boom is more radical, with Ghana and Kenya growing at more than 50% each year. This is partly attributable to new innovative payment methods, including mobile money, instant bank transfers, and payment links. This proliferation of online methods creates a significant integration and operational effort for businesses of all sizes, who struggle to collect and reconcile payments back to a single customer account.

This results in billions of dollars in lost revenue. In Africa alone, $14 billion in recurring revenue is uncollected each year. On average, the continent has a 320% higher churn rate than mature markets and higher customer acquisition costs, hitting the bottom line. End customers are unimpressed with the status quo, with 40%+ churning due to poor payment experiences. While gateways have made it easier for businesses to accept multiple payment methods, they miss the collections opportunity, leaving a fairly uncontested space to meet this burning need.

Revio’s solution

Revio helps businesses collect more revenue through better customer interactions, starting with how people pay. Founded in 2020, the platform increases customer retention and revenue by 30%+ through improved customer engagement and payment experiences.

Based on the unique insight that ‘there’s more to getting paid than accepting payments,’ Revio set out to build an all-in-one platform that businesses could use to accept multiple payment methods, reduce failed payments, and automate collections processes. The team quickly stood up a subscription billing and collections platform that offers all capabilities required to collect recurring revenue. Features include:

• Multiple payment methods at the best rates, through a single API
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• Smart payment routing and failover to surface the most cost-effective payment methods and increase payment success rates
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• Multi-channel reconciliation and exception management
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• Automated billing processes, including freemium, fixed and usage-based billing models and no-code billing logic
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• Electronic hosted invoices and intuitive check-out experiences
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• Rules-based engine for responding to failed payments
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• Real-time analytics and reporting to optimise collections processes

Through a single integration, businesses can access all these functionalities, simplifying complexity, accelerating speed to market, and increasing revenue and customer lifetime value. With partners in multiple countries, Revio provides an interface to a global processing network, making it a preferred growth partner for companies with multinational ambitions.

The team soon saw an opportunity to extend the value proposition into active recovery to reduce arrears and customer churn. The MVP solution enables businesses to reduce payment failures and churn through configurable auto-retries and dunning rules (essentially, communications to collect receivables), proactively manage card expiry to avoid failures before they happen, and automatically engage customers with personalised messaging. Combined with real-time customer segmentation and analysis, this capability can help businesses increase their customer lifetime value and direct collections effort toward the customers with the highest return on investment.

Traction and growth potential

In just nine months of trading, Revio has landed 50+ customers and processes thousands of transactions each month. Revenue has grown at 200%+ month-on-month for the past five months, and customer retention is at 100%. This may, in part, be attributable to the value-based pricing model, which aligns Revio’s business model with customer value creation.

The client base is diverse, spanning large-scale enterprises, mid-market corporates, and fast-growing scale-ups. The team has seen particular resonance with recurring revenue businesses with high transactional volumes, typically needing multiple payment methods in multiple markets. These are often insurers, telcos, retailers, subscription software or media, asset leasing or financing businesses, and alternative lenders. I’m bullish about the impact Revio can have in the insurance industry, where churn rates range from 11-35% in South Africa, and higher in other African markets. This sector alone is a multi-billion dollar opportunity.

The current traction is just the beginning of Revio’s story. Locally grounded but globally relevant, the team aims to be the go-to collections and growth partner for recurring revenue businesses in all emerging markets. While subscription models are still nascent, Revio’s solution may be a market-creating innovation, enabling companies to adopt this business model to supercharge their growth. There are also interesting product adjacencies for Revio to extend into – from benchmarks and analytics, to non-payment insurance, to subscription loans.

The team

The leadership team has over 50 years of collective experience in African payments and collections. Founder and CEO, Ruaan Botha, is a third-time fintech founder with deep payments expertise. He deeply understands the financial technology stack, having spent 12+ years in digital strategy, delivery, and IT change management at several South African banks and insurers. A disruptor at heart, he then co-founded a fintech accelerator, before leading business development for open banking startup, BankTech. His decision to start Revio was inspired by seeing how much time and manual effort businesses spend engaging customers on outstanding and failed payments. It was clear that very few companies had invested meaningfully in arrears collections. When asking 25+ clients where they would invest $1 if they had to fix their payment systems, they all unhesitatingly confirmed they’d spend at least 90c on better managing payment failures and customer churn.

Ruaan is complemented by Chief Commercial Officer, Pieter Grobbelaar, an experienced business development director, who joined from Flutterwave, where he was Country Lead for South Africa. Pieter has grown multiple fintech startups, including as the Head of Sales at Fedgroup and Revix. Chief Technology Officer, Kyle Titus, has 7+ years of venture experience under his belt, first at authentication fintech, Entersekt, and then venture studio, The Delta.

Beyond their industry credentials, I was particularly impressed by the team’s complementarity, self-awareness, and customer-centric approach to product. They are deeply committed to the problem but loosely tied to the solution, which has empowered them to test and iterate quickly in response to customer feedback and market data. I’m excited to be joining an experienced team with bold ambitions and playing a role in achieving them. Stay tuned, there’s so much more to come.

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