Nigerian fintech of the unbanked Bankly raises $2M led by Vault and Flutterwave

Nigeria remains a largely cash-dominated country. There are over 100 million adult Nigerians, of which more than half have little or no access to financial services

Today, Bankly, a Nigerian fintech startup digitizing cash for the unbanked, announced that it has closed a $2 million seed round. Founded by Tomilola Adejana and Fredrick Adams in 2018, Bankly is digitizing the informal thrift collections system known with different names such as esusu or ajo in Nigeria.

In the absence of a banking system nearby or a disregard for one, the unbanked resort to these traditional systems because they work completely offline. The system allows them to collate and save cash with a thrift collector responsible for disbursing funds when due.

However, there are issues around this system. First is the security issues that arise when the thrift collector goes missing with the money or is feared dead, leaving no clue where the savings are kept. There’s also limited access where members cannot consistently save if absent from a particular location. The third is the lack of customer data since most don’t have an online banking presence.

What Bankly has done is to digitize their whole process of collating money and allow these unbanked people to save their money using online and offline methods.

Over the past 18 months, the company has been building out its distribution and agent network. Here, customers can deposit and withdraw cash with a Bankly agent anytime. This solves the issue of access as there are thousands of agents in these cash-dependent communities.

When the information of this new set of customers is collected and saved on its platform, Bankly starts to build engaging communities where these people can collectively save their income with the agents. Slowly, an online banking presence is built for them.

With most of their money in a bank and little or no cash to buy airtime or make payments, they would frequently opt to access these services via their mobile phones.

Image Credits: Bankly

Onboarding these new set of customers means they get to save and transact more over time. This opens up access to credit and with more value created, there’s a new set of banked people, which leads to financial inclusion in the long run. With its insights into customer behaviour and transactions, Bankly also provides “data-as-a-service” to other service providers to offer tailored products and services to Nigeria’s informal sector

“The first phase is building agent networks which is good but that’s not the goal,” CEO Adejana said to TechCrunch. Just in the same way mobile inclusion happened, you need to then focus on acquiring customers who, after transferring cash to their mobile accounts, use it to buy airtime or make payments. We call that the three-phase process. The distribution first, then focusing on the consumer, after that full digitization. This is how we reach financial inclusion.”

Bankly operates like a traditional bank but with fewer assets, revenue, customers and operational costs. But because it doesn’t spend a lot in acquiring customers and building physical presences, it can pass on those cost savings to customers as interests and still make decent margins.

Agents on the platform also take commissions for any transaction a customer makes through them. This time last year, they were a little over 2,000 of them across the country. Now, Bankly has grown this number to 15,000 agents in just over a year.

The company still plans to add more agents with the new investment received. To increase its 35,000 customer base in cash-dependent communities, Bankly will also provide direct-to-consumer products in the coming months.

L-R: Fredrick Adams (CPO) and Tomilola Adejana (CEO)

In Bankly’s three years of operation, Adejana cites finding the right partners, talent, and most importantly, the right investors as challenges that the company has faced. Due to the nature of Bankly’s business, Adejana didn’t accept some of the investment offered to the company and only let in investors who aligned with the company’s plans for the unbanked.

“We’ve had to be patient to make sure that we were talking to people who deeply understand the problem and are passionate about solving it and are not about getting returns as soon as possible,” she said.

The co-lead investors include Vault, the holding company of VANSO, a fintech that was sold to Interswitch in 2016, and African payments company Flutterwave. While both companies have pioneered the technology the banked enjoy by building payment rails, they’ve done little to move the needle for the unbanked. With Bankly, there’s a chance to do so.

“Given our over twenty years experience in Nigeria’s fintech industry and previous exits, we strongly believe that Bankly understands the nuanced needs of this market — not to mention the team, strategy, and technology — to succeed in bringing affordable financial services to the unbanked. We are delighted to participate in this financing round as Bankly moves into its next growth stage,” Idris Alubankudi Saliu, partner at Vault said.

For Flutterwave, this marks its first disclosed investment into another company. When it raised a $170 million Series C last month, CEO Olugbenga Agboola mentioned to TechCrunch that Flutterwave might explore some partnerships with smaller companies and potential acquisitions in the coming years. So while the investment comes as a surprise, it’s not rare to see startups invest in other startups, particularly in the ones they hope to acquire in the future—case in point, Stripe and Paystack.

Other investors who took part in the round include Plug and Play Ventures, Rising Tide Africa and Chrysalis Capital.

Bankly aims to grow its customer base to 2 million unbanked Nigerians over the next three years. The goal is to support the Central Bank of Nigeria’s National Financial Inclusion Strategy of increasing the number of banked Nigerians from 60% to 80% by 2020. A year on, that strategy is yet to be actualized. But Adejana says Bankly is working with these regulators towards a more realistic target of 2025.

“We’re thrilled to have closed this milestone fundraise and to have such seasoned fintech investors who understand the market join us on this journey to bank Nigeria’s unbanked. Now we have built the agent network and are poised to serve customers directly via offline and online channels. Partnerships, collaboration, and a deep understanding of the needs of the unbanked will be vital to our success,” said Adejana.

Before Bankly, the CEO worked as an investment banker but it was during her masters’ program in Sydney she got into the world of fintech. After returning to Nigeria, Adejana worked on a product that offered loans to small businesses, then later joined Accion Venture Lab, a program focused on products that foster financial inclusivity. It was there Bankly started.

The product has caught on well. And while there are lots of fintech products in the Nigerian market claiming to reach the unbanked, Bankly remains one of the very few that can boldly stake a claim to that.

To truly attain financial inclusion in Nigeria, Adejana believes the onus lies with the fintechs to have long-term views just as the telcos and fast-moving customer goods did in the past. This increases the pie of customers fintechs can serve instead of taking a slice of an existing one. “For financial services to reach the last mile, it has to be distributed the same way fast-moving consumer goods are distributed,” she added

#finance, #financial-inclusion, #financial-services, #flutterwave, #funding, #payments, #startups, #tc, #unbanked, #vault

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Jeff raises $1M to build alternative credit scoring and other fintech products for Southeast Asia

According to the World Bank, more than one billion people in South and East Asia lack access to a bank account. For many, this makes it is difficult to secure loans and other services because they don’t have traditional financial records like a credit score. Jeff’s loan brokerage platform was created to make it easier for financial service providers to integrate alternative data scoring, allowing them reach more potential borrowers.

The startup, which launched its app in Vietnam last year, announced today it has raised $1 million, led by the Estonian Business Angels Network (EstBAN). The funding will be used to enter other Southeast Asian markets, including Indonesia and the Philippines, and introduce new products, like free credit score and insurance offers, digital discount coupons and mobile wallet cashbacks. Other participants in the round included Startup Wise Guys; Taavi Tamkivi, the founder of Salv who formerly held lead roles at TransferWise and Skype; and angel investors from European on-demand ride platform Bolt.

Jeff currently claims more than 300,000 users in Vietnam. Though it is based in Latvia, Jeff will continue focusing on unbanked people in South and Southeast Asia, said founder and chief executive officer Toms Niparts. Its goal is to build a “super app” that combines personalized loan comparisons with other services like e-commerce, mobile top-ups and online discounts, Niparts told TechCrunch in an email.

Before starting Jeff, Niparts was CEO of Spain for Digital Finance International, a fintech company that is part of the Finstar Financial Group, which has investments in more than 30 countries. This gave Niparts the chance to “learn about the similarities and differences of financial services from the inside in different markets,” he said.

In particular, he saw that in Southeast Asian countries, most loan applicants “were rejected not because of bad credit history, low income or other similar reasons, but because there was not enough data about them.” While some lending companies have developed pilot projects for alternative data scoring, the process is often time-consuming, complicated and expensive.

“This is a massive problem in a big part of the world, and it makes absolute sense to build it as a centralised solution,” Niparts said.

In Vietnam, Jeff currently has between 12 to 15 active partners at a time (the number changes because lenders occasionally turn off demand, a standard industry practice), and is adding another eight to 10. In total, the company now has about 80 to 100 potential partners in its Vietnam pipeline, and part of its new funding will be used to expand its team to speed up the onboarding process.

In Indonesia, Jeff has identified about 40 potential partners, “but so far we have only been scratching the surface,” said Niparts. “The Indonesian market is considerably larger than what we have seen in Vietnam, and the forecast is we will grow the pipeline to 150-200 banks and partners in 2021.”

The company’s selling point hinges on its ability to accurately measure creditworthiness based on alternative data. For lenders, this means more pre-qualified leads and access to a larger customer segment.

“Building a credit score is a never-ending process, and we are at the very early stages of it. What we have right now is mainly around publicly accessible information and client-consented data,” Niparts said. This includes behavioral analytics, smart devices meta data, data from social media and other sources that have open APIs.

As Jeff grows, it also plans to make partnerships with mobile wallets, telecom companies and consumer apps. It is developing a lender toolkit that includes bank portal and lender API to reduce the amount of time needed to integrate with the app.

Loan brokerage app Jeff's onboarding chatbot, shown on a smartphone display

Jeff’s onboarding chatbot

Borrowers sign up for Jeff with the app’s chatbot and can start getting offers once they enter basic information like their name, contact information, the amount they want to borrow and the purpose of the loan. But adding more details and data sources to their profiles, which are screened by multiple lenders at once, increases their chances of approval, and unlocks more offers. This may include uploading documents, connecting social media accounts or consenting to share their smart device metadata.

“As we evolve, new integrations and compatible accounts from other service providers—such as utilities, food delivery, and more—will be regularly added,” said Niparts.

Jeff’s partners currently offer near-prime, peer-to-peer and digital lending services that include unsecured consumer loans, installment loans and motorbike financing. It plans to add more loan products, and is also working on its first insurance collaborations, credit cards and other bank-grade products.

“Our ambition for Jeff is to become a super app, where people can not only get access to financial services that were previously unavailable to them, but also tap in other benefits and discounts,” Niparts said. “This is also a great way to learn more about creditworthiness and what’s on demand. Every new interactions gives us more data and insights to further evolve the accuracy and value added of Jeff’s credit score.”

The number of fintech startups focused on financial inclusion is on the rise across Southeast Asia. Jeff’s competitors fall into two main categories. The first are comparison portals like TopBank, TheBank and GoBear (which recently announced it is closing), that allow users to compare financial providers and banks, but don’t focus on enabling them to access services. The second are companies like CredoLab, Seon and Kalap that provide third-party services like single data-source insights and fraud prevention, but “do not have control over the customer journey,” Nipsart said.

Jeff’s goal is to “be a one-stop shop for both,” he added. “We provide both clients, as well as deeper insights about them for banks and other partners using our platform. At the same time, we are the main point of interaction for the users, which not only solves the main need of comparing financial services and accessing them, but also offers an increasing range of other discounts and benefits.”

#asia, #europe, #financial-inclusion, #fintech, #fundings-exits, #indonesia, #jeff, #latvia, #loan-brokerage, #philippines, #southeast-asia, #startups, #tc, #vietnam

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Payfazz invests $30M in Xfers as the two Southeast Asian fintechs form Fazz Financial Group

Payfazz and Xfers, two startups that want to increase financial inclusion in Southeast Asia, announced today they have joined forces to create a new holding entity called Fazz Financial Group. As part of the deal, Payfazz, an agent-based financial services network in Indonesia, invested $30 million into payments infrastructure provider Xfers.

Based in Singapore, Xfers will serve as the B2B and Southeast Asia arm of Fazz Financial Group, while Payfazz, which already uses Xfers’ payments infrastructure, will continue expanding in Indonesia. The two companies will retain their names while working together under the new holding entity.

Both Payfazz and Xfers are Y Combinator alums, and want to make financial services accessible to more Southeast Asians, even if they don’t have a bank account. Xfers co-founder Tianwei Liu told TechCrunch in an email he and Payfazz co-founder Hendra Kwik began talking about joining forces in early 2020 because of their startups’ shared goals.

“This is also coupled with the fact that last year, the COVID-19 pandemic has driven a significant increase in demand for digital payments and financial services across Indonesian rural areas, creating a huge growth opportunity for us,” Liu added.

Kwik will serve as Fazz Financial Group’s group CEO, while Liu will be the financial entity’s deputy CEO. Both will continue serving as CEOs of their respective companies. Fazz Financial Group also appointed as its chief financial officer Robert Polana, who previously held the same role at booking platform Tiket.com.

In Indonesia, Payfazz has built a network of 250,000 financial agents to reach people in rural areas where many banks don’t operate branches. Customers deposit cash with agents, and that balance can used to pay phone, electricity and other bills.

Payfazz, which announced a $53 million Series B in July from investors including Tiger Global and Y Combinator, also offers loans and payment services for offline retailers. As part of Fazz Financial Group, it will continue to build its agent banking network.

Payfazz uses payment infrastructure developed by Xfers to accept digital payments. Originally launched six years ago with an API for bank transfers, Xfers has since expanded its portfolio of software to include payment acceptance for businesses, tools for disbursing and transferring funds and a cryptocurrency wallet. In 2020, Xfers obtained a Major Payment Institution license for e-money issuance from the Monetary Authority of Singapore.

Xfers will continue to serve clients in Indonesia and Singapore with its payments infrastructure, which enables them to accept bank transfers, e-wallet funds and payments through convenience stores and agent banking networks (like Payfazz). Xfers says it has access to more than 10 million underbanked consumers in Indonesia through its work with agent banking services, and also plans to expand into Thailand, the Philippines, Malaysia and Vietnam.

Fazz Financial Group plans to launch two new products later this year: a zero-integration payment solution for Singapore-based merchants and a single-integration solution that will connect local payment methods across Southeast Asia.

Liu said that, unlike the United States, Southeast Asia “has a fragmented local payments landscape, even within each country,” meaning that consumers often use several payment methods. Creating a single-integration for payment methods in Southeast Asia gives brands a growth channel when entering new countries, allowing them to scale up more quickly, he added.

“The COVID-19 pandemic lockdown has also driven a big surge in online sales and transactions across Southeast Asia, so there is a huge need for online payments by businesses and merchants across the region,” Liu said. “The zero-integration and single-integration solution will help businesses and merchants start accepting online payments quickly and easily with a simple integration within minutes, without any need to deal with complex regulation/license handling and technology development.”

#asia, #financial-inclusion, #fintech, #fundings-exits, #indonesia, #payfazz, #payments, #singapore, #southeast-asia, #startups, #tc, #xfers

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Minu, a Mexico City-based, pay-on-demand startup, lands a $14M Series A

Many of the startups raising capital in Mexico are focused on financial inclusion, aiming to level the playing field in a country that is largely unbanked and has a burgeoning middle class.

One such company, minu, a Mexico City-based, pay-on-demand startup, announced Wednesday that it has raised $14 million in a Series A round of funding led by FinTech Collective.

New investors VEF, XYZ Ventures, and FJ Labs, as well as DocuSign founder Tom Gonser and Gusto CFO Mike Dinsdale also participated in the financing. Existing backers QED, Next Billion Ventures, and Village Global also put more money in the company. 

The financing — which included $2.5 million in debt from Banco Sabadell Mexico — brings minu’s total raised since its 2019 inception to a total of $20 million. 

Co-founders Nima Pourshasb, Rafa Niell, and Paolo Rizzi were driven to build out a pay on demand offering in Mexico.

“We really think the lack of financial health is one of the key drivers slowing the potential and productivity of Mexican society,” Pourshasb said.

Minu aims to solve the employee liquidity gap between paychecks in an effort to help people see reduced financial stress and avoid expensive loans. The company offers 24×7 instant access to employees’ earned wages for a $2 fixed withdrawal fee.

Today, minu has over 100 large enterprise clients including TotalPlay, Telefonica, Scotiabank, OfficeMax, Rappi, Adecco, Manpower, Cap Gemini, and public sector clients such as the Electoral Institute of the State of Mexico. It saw its transaction volume and revenue grow by 18 times in 2020, albeit from a small base. The company declined to reveal hard revenue figures.

Minu operates under the premise that the liquidity gap is profound in Mexican society. An estimated 70% of workers live from paycheck to paycheck with average wages of $550/month, noted Pourshasb. And only 37% of Mexicans over 15 years old have a bank account, according to recent World Bank stats.

“Some people are continuously getting loans — at very high interest rates —  to cover recurring expenses such as food and transport,” Pourshasb said.

Minu’s first product offers instant, 24-7 access to earned wages.

“This is money that is already earned,” Pourshasb said. “Our users have an app to see how much is available and if they need those funds, they can instantly receive them.” 

The company’s distribution model is B2B so it works alongside large enterprises to offer access to the wages as a benefit for employees. Businesses are attracted to that model, Pourshasb explained, because they don’t have to pay for it or change their payroll process.

“We integrate with payroll so the process is automated and there’s no added work for them,” he added. “It also doesn’t affect cash flows. These are upfront funds so if someone withdraws money, it gets deducted from payroll.”

Some employers do subsidize the cost of the transaction fee for employees.

Looking ahead, minu says it will use its fresh capital to boost its headcount of 60 as well as expanding its offering to include financial education, savings, smart spend and insurance products. The company also plans to expand outside of Mexico.

Carlos Alonso Torras, who leads Latin America investing for New York-based FinTech Collective, believes that minu leverages “a strong combination of an exceptional founding team and auspicious macro trends.”

“We see the company’s current product as the basis for a platform that will offer an array of necessary financial products to a very underserved demographic,” he wrote via email. “Minu is already creating a moat vis a vis competitors via deep integrations, high client satisfaction and a broadening financial wellness offering. As the early mover in a market whose characteristics are conducive to the success of pay on demand, the immediate growth potential is remarkable, and Minu is uniquely positioned to excel.”

The investment marks the firm’s fifth in Mexico. Overall, FinTech Collective says it seeks and backs entrepreneurs “who are rewiring how money flows through the world.”

“Due to COVID, we are seeing a pandemic stricken world where hundreds of millions of people are facing greater financial instability, and we believe that fintech has a vital role to play in accelerating the emergence of a spending middle class underserved by traditional financial systems,” Torras added. 

Fintechs in Mexico have been busy. Last week, Stori raised a $32.5 million Series B round with the goal of “becoming Mexico’s leading credit card issuer for the rising middle class.”

Also in February, Flink raised $12 million in a Series A led by Silicon Valley-based venture capital firm Accel.

 

#banco-sabadell, #finance, #financial-inclusion, #financial-technology, #fintech-startup, #fj-labs, #funding, #fundings-exits, #latin-america, #mexico, #mexico-city, #payroll, #recent-funding, #startups, #tc, #venture-capital, #village-global, #xyz-ventures

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Mono, a startup that wants to build Plaid for Africa, gets backing from Y Combinator

Prakhar Singh and ex-Paystack employee Abdul Hassan have known each other for seven years, building different tech products individually and collectively along the way.

Before joining Paystack in 2018, Hassan co-founded OyaPay, a payments startup the year before. After leaving the Stripe-owned company in 2019, he launched a data startup called Voyance where Singh, who had already exited one of his products — Transferpay.ng, an offline payments startup — was a software engineer.

Last June, the duo started working on Mono, a project that would allow companies to access their customers’ financial accounts in Nigeria.

By streamlining various data in a single API, companies and third-party developers can retrieve vital information like account statements, real-time balance, historical transactions, income, expense and account owner identification. Of course, this isn’t without users’ consent as they are required to login with their internet or mobile login credentials before any transaction takes place.

Following a series of tests and iterations, Mono launched its beta version in August, with Hassan as CEO and Singh as CTO. A month later, the startup closed a $500,000 pre-seed investment from early-stage investors like Lateral Capital, Ventures Platform, Golden Palm Investments and Rally Cap. It was one of the notable pre-seed rounds on the continent because of the length of time it took from launch to funding, a trait other API fintech startups in the region share, albeit with significantly longer timelines.  

In a region where more than half of the population is either unbanked or underbanked, these open finance players are trying to improve financial inclusion on the continent. Open finance thrives on the notion that with access to a financial ecosystem via open APIs and new routes to move money, access financial information and make borrowing decisions, the barriers and costs of entry for the unbanked and underbanked might come down. 

However, for Hassan, Mono’s play overlaps open finance and open banking. Although the two terminologies portray what these African startups want to accomplish, the CEO believes that they are subject to regulation from the government and apex financial institutions. Mono is a data company playing in the fintech space, he says.

Prakhar Singh (CTO) and Abdul Hassan (CEO)

He likened Mono to how Google was in its early days when it started with a simple mission to organize the world’s information and make it accessible. Decades later with enormous data, Google has metamorphosed into an internet giant playing in a plethora of sectors.

“If you ask me, I’ll say we don’t see ourselves entirely in open banking or finance,” he told TechCrunch. “Today, we’re concerned about how we can get data from different sources and aggregate into a database where businesses can get access to them with our users’ consent. Down the line, we can use this data for different use cases and solve various problems.”

Mono has already secured partnerships with more than 16 financial institutions in Nigeria and has a little over a hundred businesses like Carbon, Renmoney, Flutterwave and Indicina using its platform. They process about 5 million datasets per hour, the CEO claims.

These clients are mainly lending companies with a few others in proptech and health tech, which allow users to pay for their services in installments. But there are plans to diversify this clientele. One such way will be to improve onboarding processes on applications through its one-click signup feature.

From a user’s perspective, here’s how it works when considering two savings applications: Users submit their KYC to the first savings app. But for one reason or the other, maybe due to a better interest rate, some users switch to a second savings app.

However, there’s a little hassle in that a second KYC is needed for this process. What Mono has done with the one-click signup feature is to let users transfer their data from the first app to the second without repeating the process. And to that end, Mono has partnered with two of Nigeria’s leading savings and investment platforms to roll out the service. 

“First, we’ve enabled companies with a new infrastructure that allows them to get access to customers’ financial accounts and understand their history before giving them loans or any financial service. Now, we think with the new generation of companies coming up in Africa, Mono will be the one to power their onboarding processes,” Hassan remarks on the platform’s offerings.

Image Credits: Mono

For any investor, Mono’s sticky features, coupled with explosive growth, looks too good of an opportunity to pass on. Today, the six-month-old startup announced that it has been accepted into Y Combinator’s Winter 2021 batch. It will receive $125,000 in seed funding with an opportunity to receive follow-up investment after graduating in March. The startup also joins 39 other African startups per YC data which have passed through the accelerator since 2009.

Getting into the accelerator helps Mono with one of its biggest challenges. According to Hassan, Mono has come across users who are still skeptical to input their internet banking details on the platform due to personal experiences with online fraud in the country.

“To date, we’ve been focusing on building, and I think we’ve gotten to a stage where we’re seeing some people not wanting to use their internet banking on Mono.” But with YC’s backing and a conscious offline marketing plan afterwards, the founder thinks Mono’s credibility can get a lift.

At Paystack, where Hassan was a product manager, he was privileged to experience firsthand the company’s innovation and growth before it was acquired by Stripe last year. He says he learned the ropes of product development and management, and hiring — lessons that have stuck with him to Mono, a company now with 13 staff across Nigeria and India.

The plan for Mono is to be a global company and getting into YC provides the perfect opportunity to do so. The company is also planning an imminent pan-African expansion to Ghana and Kenya, and from all indication, Mono might execute one if not the two before the end of Q1. Setting the company up for expansion and the hiring spree that comes with it will require capital, so a seed round is in the works to facilitate the whole process.

 

#africa, #finance, #financial-inclusion, #fintech, #mono, #open-banking, #open-finance, #startups, #y-combinator

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Nigeria’s Okra raises $1M from TLcom connecting bank accounts to apps

A new Nigerian fintech venture, Okra, has racked up a unique mix of accomplishments in less than a year.

The Lagos based API developer created a product that generates revenues from both payment startups and established financial institutions.

Okra has raised $1 million in pre-seed funding from TLcom Capital — a $71 million Africa focused VC firm that rarely invests in early-stage companies or fintech.

The startup is also poised to enter new markets and it’s hiring.

Founded in June 2019 by Nigerians Fara Ashiru Jituboh and David Peterside, Okra casts itself as a motherboard for the continent’s 21st century financial system.

“We’re building a super-connector API that…allows individuals to connect their bank accounts directly to third party applications. And that’s their African bank accounts starting in the largest market in Africa, Nigeria,” said Ashiru Jituboh.

As a sector, fintech has become the continent’s highest funded tech space, receiving the bulk of an estimated $2 billion in VC that went to African startups in 2019. Those ventures, and a number of the continent’s established banks, are in a race to build market share through financial inclusion.

By several estimates — including The Global Findex Database — the continent is home to the largest percentage of the world’s unbanked population, with a sizable number of underbanked consumers and SMEs.

With 54 countries, 1.2 billion people and thousands of relatively young startups, there are a lot of moving parts in Africa’s fintech space. Similar to U.S. company Plaid, Okra is shaping a platform that connects accounts and financial data to banking apps into a revenue generating product.

With Africa’s largest population of 200 million people, Nigeria serves as a major financial hub — but there’s still a disconnect between fintech apps and banks, according to Okra’s Ashiru Jituboh.

“Here in this market there’s no way to directly connect your bank account through an API or directly to an application,” she said.

Okra offers several paid packages for those types of integrations and opens up the code to its five product categories —  authorization, balance, transactions, identity and accounts — to developers.

Image Credits: Okra

Okra has already created a diverse client list that includes mobile payments startup PalmPay, insurer Axa Mansard and Nigerian digital lender Renmoney.

The startup generates revenues through product fees and earns each time a user connects a bank account to a customer, according to Ashiru Jituboh.

On how the Okra differs from other well-funded fintech companies in Nigeria, such as Flutterwave or Interswitch, “The answer is we’re not doing payments, but what we’re doing is making processes with [payment providers] even smoother,” she said.

Ashiru Jituboh comes to her CEO position with a software engineering background and a strong connection to the U.S. Born in Nigeria, she grew up in and studied computer science in North Carolina.

She did stints in finance — JP Morgan Chase and Fidelity Investments — and then in tech companies before making the leap to founder. “I went to work in startups, but I was always employee number two or three,” said Ashiru Jituboh.

She decided to go all in on Okra after returning to Nigeria and noting the need for linking together the country’s emerging digital financial infrastructure.

“When we knew that it was a big addressable market is when we realized that all these fintech CEOs and CTOs were struggling with this use case,” she said.

Shortly after its launch, Okra attracted the attention of TLcom Capital in second quarter 2019, according to VC Andreata Muforo.

With offices in London, Lagos, and Nairobi, the group closed its $71 million Tide Africa fund this year. TLcom has focused primarily on Series A and later investments, including backing Kenyan agtech startup Twiga Foods and Nigerian trucking logistics company Kobo360.

In an interview last year, the fund’s managing partner, Maurizio Caio, explained that TLcom was steering more toward investments in infrastructure oriented tech companies and away from Africa’s more commoditized payments and lending startups.

The VC firm was attracted to Okra for its ability to serve the continent’s broader financial sector. “It’s a service that other fintechs can plug into and utilize, so it’s accelerating the growth of fintech across the continent…That to us was a big hook,” TLcom’s Andreata Muforo told TechCrunch on a call.

Founder Fara Ashiru Jituboh was also a factor in the fund making a $1 million pre-seed investment in Okra. “We found her to be very strong and also liked the fact that she’s a technical founder,” said Muforo. As part of the investments, she and TLcom Capital partner Ido Sum will join Okra’s board.

In addition to hiring fresh engineering talent, the startup aims to take its product offerings that connect bank accounts to apps to new African countries — though it would not disclose where or when.

“We’re looking at three target markets that our clients are already in,” said Ashiru Jituboh. Okra investor Andreata Muforo named Kenya — with one of the highest mobile money penetration rates in the world — as a likely candidate for the startup’s product services.

#africa, #african-business, #african-tech, #api, #axa, #bank, #banking, #ceo, #david-peterside, #early-stage-funding, #economy, #fara-ashiru-jituboh, #fidelity-investments, #finance, #financial-inclusion, #financial-technology, #ido-sum, #jp-morgan-chase, #kenya, #kobo360, #lagos, #london, #managing-partner, #maurizio-caio, #money, #nairobi, #nigeria, #north-carolina, #okra, #palmpay, #tc, #tech-in-africa, #techcrunch, #tlcom-capital, #twiga-foods, #united-states

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In Nigeria PalmPay waives fees and creates ₦100M COVID-19 payout fund

Africa focused payment startup PalmPay will waive transfer fees in Nigeria and offer direct payouts to customers who have contracted COVID-19 in the West African country.

The venture — that launched in 2019 backed by China’s Transsion —  has created the PalmPay Support Fund. The initiative will start with 100 million Naira (≈ $300K) and offer individual payments of 100,000 Naira (≈ $250) to PalmPay customers who have contracted the coronavirus.

The startup will expand the fund’s value by providing a matching gift per customer transaction for at least on month. PalmPay will also extend the fund to offer grants to organizations working on coronavirus mitigation and assistance efforts in Nigeria.

On the structure of the initiative — and adding a matching function — PalmPay aims to create interactivity with its clients on coronavirus relief efforts. “We want to provide relief…and get our customers feeling that they’re adding something to it as well,” PalmPay CEO Greg Reeve told TechCrunch on a call.

The company has created a page on its app for applications and funds dispersal. PalmPay is working with Nigeria’s Center for Disease Control on a verification process to confirm those who apply have tested positive for COVID-19, according to Reeve.

Image Credits: PalmPay

PalmPay’s initiative comes as COVID-19 has hit Africa’s largest economies and the continent’s fintech platforms have been mobilized as tools to stem the spread.

Early in March, Africa’s coronavirus numbers by country were in the single digits, but by mid-month those numbers had spiked, leading the World Health Organization’s Regional Director Dr Matshidiso Moeti to sound an alarm.

By WHO stats Tuesday there were 14,922 COVID-19 cases in Africa and 702 confirmed virus related deaths, up from 345 cases and 7 deaths on March 18.

Countries such as South Africa, Kenya and Nigeria — which happen to be Africa’s top tech hubs — have imposed social distancing and lockdown practices.

Governments and startups on the continent have also turned to measures to shift a greater volume of financial transactions to digital payments and away from cash — which the World Health Organization flagged as a conduit for the coronavirus.

It’s an option facilitated by the boom in fintech that’s occurred in Africa over the last decade. By several estimates, the continent is home to the largest share of the world’s unbanked population and has a sizable number of underbanked consumers and SMEs.

But because of that opportunity, fintech startups now receive the majority of VC funding annually in Africa, according to recent data.

Increasingly, Nigeria has become the focal point for digital finance development on the continent, boasting Africa’s largest economy and population (200 million).

The country has multiple new digital-payments entrants — see Chippercash — and several firmly rooted later-stage fintech players, such as Paga and recently confirmed unicorn Interswitch.

PalmPay launched in Nigeria last year on the back of one of Africa’s largest 2019 seed-rounds — $40 million led by Transsion. In addition to a lot of capital, the investment came with an additional competitive advantage for the startup. Through its Tecno brand, Transsion is the largest seller of smartphones in Africa and PalmPay now comes preinstalled on all Tecno devices.

Image Credits: Jake Bright

While PalmPay reamins in the race to capture fintech market share in Nigeria, for now the startup looks to weather the COVID-19 crisis in the country. Like most of Nigeria — and much of the world — PalmPay’s staff are on lockdown and working from home, according to the company’s CEO.

Commercial times in the country could be tough into the next year. Nigeria has already seen a reduction in economic activity as a result of COVID-19, and as a major oil producer, the country will face an additional economic blow due to the drop in demand the pandemic has dealt to petroleum markets.

A trend that could come out of the crisis that benefits fintech players, according to PalmPay CEO Greg Reeve, is greater digital finance adoption in Nigeria. In the past, the country has shown a cash-is-king reluctance by parts of the population to use mobile payments and lagged Africa’s digital finance leaders Kenya and South Africa.

The current health crisis could shift consumer habits in Nigeria, according to Reeve. “We’ve seen an increased use in our service, whilst people aren’t able to move around,” he said.

“There is a natural uptake right now for services like mobile money and I think when people start to use it, they’ll continue to use it when the COVID-19 ceases.”

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