In this article, I examine the evolution of TeamApt and draw parallels to how tech companies and startups typically operate.
In this article, I examine the evolution of TeamApt and draw parallels on how tech companies and startups can operate to make the most of their time in business.
Company structure
In 2020, TeamApt Limited, a Nigerian company registered in April 2015, created a holding company (holdco), TeamApt Incorporated.
Last week, he announced the name change of his holdco to Moniepoint Incorporated. Moniepoint is the name of TeamApt’s flagship product that offered agency banking services.
In the first quarter of 2022, TeamApt received its microfinance bank (MfB) license, naming it Moniepoint microfinance bank.
Thus, there are three known entities in the TeamApt ecosystem; a holding company (Moniepoint Inc.) and two operating companies: TeamApt Limited and the microfinance bank Moniepoint.
This structure illustrated in figure 1 above is what many startups in Nigeria maintain, especially those in a regulated space like financial services.
A Delaware registered company is created to facilitate access to capital for foreign investors. With a US entity, you can create local US bank accounts to receive US dollars, instead of working through domiciliary accounts. Additionally, being Delaware, a state with conventional investment laws, allows both investors and startups to quickly align on the legal terms of an investment. So transactions close faster if the entity is registered in Delaware. In fact, YC, a Popular accelerator option for startups in Africarequires its startups to form a Delaware C-Corp before investing.
Next, you have a company registered in the startup’s country of operation. To apply for a regulatory license, you must set up a local entity that will be used to submit the application.
So in the case of TeamApt, its Nigerian entities have the operating licenses to do business in Nigeria. TeamApt Limited holds the processing and switching license from the Central Bank of Nigeria (CBN), while Moniepoint microfinance bank holds the banking license.
In Nigeria, many startups involved in some level of banking opt for the acquisition of an MfB to gain faster access to the underlying CBN license. In addition, there are rumors that the CBN is not willing to grant new licenses to MfB applicants due to the large number of deceased.
So when these new companies acquire the MfB, they then file a name change for the MfB, so that it bears their brand name. For example, Eyowo acquired an MfB and changed the name to reflect its brand. Therefore, the Eyowo MfB is now called the Eyowo Microfinance Bank. This is the same approach that TeamApt took.
Now, how did TeamApt go from a limited company providing development services to banks to a new company selling its products directly to customers? Figure 2 is an infographic that summarizes aspects of evolution.
