South African tech startup Talk360 has raised R22m in new funding to expand its customer base and build a digital goods trading service.
The transaction is seen as another sign of a maturing South African startup ecosystem where angel or early investors in companies are able to make a return and there is a larger flow of capital to the platforms that need it.
Talk360 is a calling app that helps consumers make international calls to mobile and landline numbers for less. It has more than 6-million customers.
The company announced a $1.4m secondary investment, led by local venture capital group Havaic. There was also participation from Universum Wealth, a limited partner in Havaic’s $50m African Innovation Fund 3.
This follows the $1.4m the company raised in September — about R24.34m at the time. This was in a funding round before series A and led by long-standing investor Havaic. That round was based on the same $30m valuation the company received in 2022, when it raised $7m through two seed funding rounds.
At the time, Dean Hiine, co-founder and MD for Africa at Talk360, told Business Day the new capital injection is earmarked to push Talk360’s goal of connecting 7-million people by 2025 while strengthening the prospects for long-term profitability.
Even with the growth of platforms such as WhatsApp, Telegram, FaceTime and others, which all have calling capability, Hiine said Talk360 still enjoyed growth. A big reason is that many people, particularly in Africa, do not have access to smartphones and internet-based calling, leaving a gap for Talk360 to exploit.
This brings the total raised since 2022 to $10m.
The company said the latest investment will support its next phase of product development and platform expansion.
“This includes further improvements to the user experience and the continued build-out of Shop360, a new feature that enables users to instantly send mobile airtime, data bundles and top-ups to family and friends in more than 180 countries.”
Over the years, the company has recorded a number of key milestones. It confirmed it is making profits, which bodes well for its place in the market, especially as investors are increasingly tightening up and looking for returns.
It said this marks Talk360’s “transition from an early-stage scale-up to a disciplined, sustainable business”.
The company is also celebrating the successful spin-off of its payments arm into NjiaPay, which is looking to capitalise on the gap left by the discontinuation of Skype-out for travellers and business users worldwide.
“As Talk360 consolidates its place as a leader in the African market and moves into the growth phase of its startup journey, we are excited to further support management through greater shareholding and an ever-evolving relationship built on a common vision to solve real-world challenges in Africa and beyond,” said Ian Lessem, managing partner at Havaic.
In November, Lessem’s firm participated in a $10m series A funding round for SwiftVEE, which has positioned itself as Africa’s largest online livestock trading platform.