There has always been a lingering hitch of sending money overseas from Africa, and African, being payment destination can even be the most tedious transaction to embark on, owing to the limited payment options, transfer charges, and time-consuming processing durations.
In a bid to resolve this hassle, Lagos and San Francisco-based fintech startup, Afriex, a Summer 2020 Y Combinator-backed company launched a digital payments platform to provide instant, zero-fee money transfers to Africans at home and abroad.
Yesterday, it announced a raise of a $1.2 million seed round to continue scaling its platform across the African continent, according to TechCrunch.
The round was led by Pan-African VC firm Launch Africa, with participation from other investors such as Y Combinator, SoftBank Opportunity Fund, Future Africa, Brightstone VC, Processus Capital, Uncommon Ventures, A$AP Capital, Precursor Ventures, and Ivernet Holdings. Angel investors for the round included Russell Smith, Mandela Schumacher-Hodge Dixon, Furqan Rydhan, and Andrea Vaccari.
With its newest investment, Afriex looks to scale up its business model by expanding both its team and outward to other markets.
The company, which was founded by Tope Alabi and John Obirije in 2019, built its platform on cryptocurrency which allows its app users to “deposit cash on the app, send money to a bank account or another user, and withdraw money to a connected bank or debit card,” according to TechCrunch.
With its operations in countries like Ghana, Kenya, and Uganda, the company is now processing millions of dollars each month, Afriex reveals. However, it was also stated that customers can only send money to and from Nigeria, Ghana, Kenya, Canada, and the United States.
Afriex co-founder Alabi observed the difficulties that came with sending money to Nigeria from his upbringing, so he used his experience as a blockchain developer at Consensys to find a resolution for the problem.
“We would go back home every two years and even then, I would always take note of what was missing and what could be improved. I would find myself having to pay for foreign expenses with money that was sitting in a US bank account,” Alabi shared.
“Traditional remittance companies were so slow 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.”
Generally, the startup’s goal now is to introduce its payments system to Africa as a whole in order to assume the same level of popularity with other money transfer platforms like Western Union and Wise.
