Stanbic IBTC Holdings Plc, the Nigerian arm of Standard Bank Group, plans to recapitalise its fintech subsidiary, Zest Payments Limited, with ₦4 billion ($2,480,040) following a ₦148.71 billion capital raising exercise.
The funding, representing about 3% of the total amount to be raised, will bolster Zest, in the competitive Nigerian fintech market.
“Around 3.6% of ₦148.71 billion which is five billion naira will be used to recapitalise two subsidiaries,” Kunle Adedeji, Acting CEO and Group CFO of Stanbic IBTC, said at a recent investor presentation during the bank’s right issue. “Zest Payments will get about four billion while one billion will be given to our venture business.”
This is indeed cherry news for Zest, which is lagging behind peers like GTCO’s fintech subsidiary, HabariPay, and Access Holdings’ fintech, Hydrogen. Launched in May 2023, Zest has been unable to turn a profit thus far. The fintech’s path to profitability is slower than Hydrogen which eventually turned a profit in its second year. In 2023, Zest Payment Limited formerly known as Stanbic IBTC Financial Services recorded a loss of ₦1.2 billion — Its total income for the year was ₦68 million.
“The likes of Hydrogen and HabariPay are 18 months older than Zest,” CEO Stanley Jacob told Condia, stressing that the fintech’s real year of operation was October 4, 2023.
“Zest is not a switch, like other fintechs. Our strategy is payments and e-commerce because our banking group supports lots of businesses. Essentially, our fintech is primarily catered to them,” he added.
Zest’s core offering is electronic commerce designed to help businesses establish online sales channels. The platform features customisable product listings, integrating various payment solutions including QR codes, USSD, Card payments and Bank transfers. The fintech also has a Value Added Service (VAS) aggregator license for facilitating bill payments and a payment licence. “We have 25,000 products on our marketplace.”
Despite increasing its income to ₦93 million in the first nine months of 2024, Zest fintech widened its losses to ₦1.89 billion. The full-year report for 2024 is unreleased at the time of filing this report. The recapitalisation reflects Stanbic IBTC efforts to revitalise its fintech ambitions and ensure future profitability in a rapidly evolving market.
$1 = ₦1,612
