Afriex raises $B.2M seed to scale its funds and remittances platform throughout Africa

Posted On Apr 18, 2021 By admin With Comments Off

Sending money from the U.S. to Nigeria can be a painstaking process. For remittance stages like Western Union, it will cost a transportation fee and take between one to five business periods for money send from a U.S. debit card to enter a Nigerian bank account.

Crypto remittance programmes are rising to the challenge of fixing these cross-border payment topics by reducing time and fees. Precisely yesterday, we talked about Flux, a Nigerian fintech solving this problem in the present YC W2 021 batch. Today, another YC-backed startup, Afriex — but from the Summer 2020 quantity — is raising a $1.2 million seed round.

The company founded by Tope Alabi and John Obirije in 2019 provides instant, zero-fee transportations to Africans at home and in the diaspora. It allows users to deposit money on the app, move fund to a bank account or another user, and withdraw coin to a connected bank or debit card.

Like other crypto remittance programmes, Afriex has built its business on stablecoins — cryptocurrency backed by the dollar. In essence, the company buys cryptocurrency in one country and sells it in another to offer better exchange rates. This is in contrast to better-known scaffolds like Western Union and Wise that use traditional banking systems.

Last year while the startup graduated from YC, it claimed to be processing about $500,000 per month in transaction costs and is applicable in over 30 countries. At the time, Afriex was only present in Nigeria and the U.S. But having started functionings in Ghana, Kenya, and Uganda, Afriex claims to be processing millions of dollars each month. On its website, though, Afriex states that customers can only send money to and from Nigeria, Ghana, Kenya, Canada, and the U.S.

With the brand-new speculation, the Lagos and San Francisco-based startup is looking to scale up by growing the team and expanding to other markets.

Pan-African VC firm Launch Africa led the seed round. Other investors include Y Combinator, SoftBank Opportunity Fund, Future Africa, Brightstone VC, Processus Capital, Uncommon Ventures, A$ AP Capital, Precursor Ventures, and Ivernet Holdings. Angel investors like Russell Smith, Mandela Schumacher-Hodge Dixon, Furqan Rydhan, and Andrea Vaccari also took part.

The SoftBank Opportunity Fund, an owned subsidiary of the SoftBank Group, targets benefactors of color in the U.S. loping early-stage startups. Since launching in June 2020, it has invested in 22 startups and Afriex seems to be the only one catering to a regulate of users in the US and another continent.

SoftBank opens $100 M+ Opportunity Growth Fund to invest in benefactors of colour

This is due to Alabi’s upbringing as an immigrant child who has had a mix of both world-wides. It was difficult to send money to Nigeria and its own experience as a blockchain developer at Consensys uttered him recognise he could solve a problem.

“We would go back home every two years and even then, I would ever take note of what was missing and what could be improved. I would find myself having to pay for foreign expenditures with coin that was sitting in a US bank account, ” said Alabi. “Traditional remittance corporations were so sluggish and costly that I knew I could do it better with crypto. Remittance is the best and most important use case for crypto. Our goal is to build the world’s largest remittance company, starting with emerging markets.”