Carina Rumberger, CEO of Beyonic, the Ugandan fintech that was acquired by MFS Africa in June
Beyonic became a profitable company in 2018, five years after it was founded by Luke Kyohere and Dan Kleinbaum.
Starting with a pilot in Uganda, the company figured out an efficient business model for delivering payment management solutions to small and medium businesses in Rwanda, Tanzania, Kenya and Ghana.
The initial focus was mobile money integrations. Before long, their suite of products evolved to include cash flow management and identity verification.
Profitability was an exciting achievement for Kyohere and Kleinbaum but the exponential growth brought a new headache. The company needed to adapt its erstwhile lean-startup-mode operations to suit its expanding focus areas.
They resolved to seek strategic advice, hiring Carina Rumberger in August of that year.
A former teacher in Tanzania in the early 2000s who became a management consultant on Environmental Social and corporate Governance (ESG) compliance in South Africa, Rumberger joined Beyonic as a strategic advisor for growth.
Soon after, the board recommended she assume the role of CEO to not only suggest but lead the companys bigger ambitions.
In order to serve the growth that we wanted to keep up, we needed to scale pretty rapidly, Rumberger said on TechCabal Live last week.
The company wasnt changing its core but teams, systems and infrastructure needed to be improved to respond to the pressures of growth. That meant raising capital, rolling out a Series A round in the third quarter of 2019 with the intention to not give away more than 25% of the company.
In South Africa meanwhile, MFS Africa had built a hub for cross-border money transfer, facilitating peer-to-peer exchange between users of different mobile money platforms in different countries.
It was a similar yet distinct kind of growth pressure to what Beyonic was faced with: the volume and kinds of transactions passing through the hub increasingly began to resemble business-related transactions.
They started seeking out ways to improve their infrastructure to fulfill the new demand.
Taking over as CEO from founders
Kyohere, and Dare Okodjou; the founder and CEO of MFS Africa, had several conversations about potential strategic partnerships. These conversations predated Rumberger joining Beyonic.
She joined at a time when Kleinbaum was moving out of a management role as companys chief operating officer. Kyohere had transitioned to become the chief technology officer.
As CEO, it would be Rumbergers responsibility to actively lead the leg work involved in the deals being negotiated. She had to do this by working in sync with Kyohere who had the technical expertise on fintech.
Noting that as with individuals in any friendship or business relationship there is no perfect match, Rumberger praises Kyohere for being focused on the companys best interest rather than personal glory.
Hes not a founder with a huge ego, she said.
She observes that founders typically have visions of what they want to achieve in their minds but may not always be able to convey their mental blueprints to others:
So much is typically in their head. They just do everything automatically because they have that vast store of historical knowledge and its difficult for them often to download that data into somebody elses brain and it is really difficult to do it in a systematic way.
That said, she has established a successful work relationship with Kyohere based on mutual trust, openness to learning, vulnerability, and regular communication. These ingredients are welded by a commitment to keep working on things even when it feels they arent working well.
A strategic merger is based on shared values
Despite much of the technical and product-fit negotiations being between Kyohere and Okodjou, Rumberger had to be convinced of both companies cultural compatibility.
A face-to-face meeting over breakfast with Okodjou in Johannesburg, South Africa, satisfied her.
What I was looking for was shared value, shared vision, and organisation that understood that our greatest value is our people, she said.
MFS Africa was not buying them for their client list or tech stack alone. The acquisition was not a case of one heavyweight subsuming and underplaying the uniqueness of the acquired company. Beyonic wasnt being bought to be chopped up and sold off in parts.
Because both companies had operations in multiple countries, due diligence had to be meticulously done on a framework that considered variations in operations in each locality.
The deal progressed smoothly afterwards. Talks on a term sheet began in December 2019 with signatures appended by Christmas.
I have to give tremendous credit to Luke and Dare. That negotiation happened between those two people under the assumption of good intent and never forgetting that the end goal was to do great things that we both cared about together, Rumberger said.
The MFS Africa-Beyonic deal is being talked about in many circles as a visible example of the good prospects for investing in Africa. Beyonic investors who chose to cash out during this sale received 5x returns on their investment, Rumberger said. The majority invested in 2016 at the companys seed stage.
Those who are exiting represent half of the startups investors. Sensing the prospect for more growth to lead to an even more profitable payday in the future, the other half have rolled their investment over into the MFS Africa bucket.