Investor Updates: August 29 2022

Grey secures $2m for its cross-border payments service

Highlights

• Grey, a Nigerian startup that provides virtual international bank accounts to African freelancers and remote workers, has raised $2 million in seed funding.
• Idorenyin Obong and Femi Aghedo founded Grey in July 2020. Last year, the startup raised an undisclosed pre-seed investment and got accepted into YC’s winter batch this March.
• The Nigerian fintech has since expanded into East Africa, starting with Kenya, anchored on partnerships with payments giant Cellulant and edtech upstart Moringa.

Source: TechCrunch

Our Takeaway

Africa is the most expensive region to send money to, with 10.6% in average transaction fees. Although most of the traditional players that charge high commission rates still dominate the space, controlling as much as 80% of the market, a number of digital-first platforms like Grey, have sprung up in recent years offering lower rates to Africans looking to receive foreign currencies. Grey claims to have about 100,000 individual users, and since the beginning of the year, its transaction volumes have increased by 200%.

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Nigerian embedded finance platform Anchor raises $1m

Highlights

• Anchor, a Nigeria-based banking-as-a-service (BaaS) platform, has raised over $1 million in pre-seed funding from a host of venture capital firms and angel investors.
• With the funding, Anchor is launching its public beta API infrastructure to make it easier for African businesses to build, embed, and launch financial products, starting in its first market, Nigeria.
• The startup was also accepted into Y Combinator Summer 2022 Batch as the first African BaaS and embedded finance platform.

Source: TechCrunch

Our Takeaway

Across Africa, it reportedly takes an average of $500,000 and 18 months to build and go to market with financial products; companies need to go through the hurdles of rigorous licensing and compliance processes, multiple integration layers, complex banking and third-party relationships, and invest in complicated core-banking infrastructure. Banking-as-a-service platforms like Anchor help reduce the time and financial costs of building through their API infrastructure. We believe this is the next phase of fintech innovation in Africa and should aid digital financial services in capturing the sizeable financial inclusion opportunity on the continent.

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Egypt’s enterprise SaaS provider Zeew closes $630k seed round

Highlights

• Egypt-based e-commerce SaaS startup Zeew has raised a $630,000 seed round from Plug and Play, Poland Prize, and a group of angel investors, bringing the total funds it has raised in the past couple of years to $1 million.
• Founded by Mohamed Ghaith in 2017, Zeew lets companies launch their on-demand delivery businesses, enabling them to track and control their operations through its customizable, hyperlocal SaaS solution.
• The startup plans to use the newly acquired funding to grow its team to serve more customers worldwide.  

Source: Wamda

Our Takeaway

The enterprise software as a service (SaaS) space is one of the rapidly rising sectors in the Egyptian, and broadly African, startup ecosystem. More companies within the space are scaling up and piquing investor interest. Specifically, the Middle East and Africa’s enterprise software industry is expected to grow to $31.4 billion by 2026, from $14.2 billion in 2021. Currently, Zeew is present across 100 countries, with merchants in different verticals including logistics, food and grocery, restaurants, pharmacy, etc.