Afriex raises $1.2M seed to scale its payments and remittances platform across Africa

Afriex raises $1.2M seed to scale its payments and remittances platform across Africa

Sending money from the U.S. to Nigeria can be a painstaking process. For remittance programmes like Western Union, it will cost a move 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 questions by reducing time and costs. Precisely yesterday, we talked about Flux, a Nigerian fintech solving this problem in the present YC W2 021 quantity. Today, another YC-backed startup, Afriex — but from the Summer 2020 batch — is raising a $1.2 million grain round.

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

Like other crypto remittance pulpits, 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 pulpits 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 busines fees and is used in over 30 countries. At the time, Afriex was only present in Nigeria and the U.S. But having started actions 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 headed 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 founders of color in the U.S. moving 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 deep-seated of users in the US and another continent.

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This is due to Alabi’s upbringing as an immigrant child who has had a mix of both macrocosms. It was difficult to send money to Nigeria and its own experience as a blockchain make at Consensys made him recognize he had been able to 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 enhanced. I would find myself having to pay for foreign expenditures with fund that was sitting in a US bank account, ” said Alabi. “Traditional remittance firms were so gradual and expensive 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.”

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