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Fintech startup Stitch raises US$21m Series A funding round to enter new markets

SOUTH AFRICA – Stitch, a fintech startup, has raised a US$21 million Series A funding round to expand its team, launch new product offerings, and enter new markets across the continent.

The round led by The Spruce House Partnership, with participation from PayPal Ventures, TrueLayer, firstminute capital, The Raba Partnership, CRE Venture Capital, Village Global, Zinal Growth, and others, including founders of Chipper Cash, Quovo and Unit.

The startup announced a US$4 million seed round in February of last year, and extended it to US$6 million in October, when it also expanded to Nigeria.

“We are incredibly fortunate to be supported by some of the best investors, founders and builders in the fintech space globally,” said Stitch co-founder and CEO Kiaan Pillay.

“They are working closely with us to enable the boom we’re seeing in financial technology on the continent. Across the hundreds of customers, we work with, big and small, we’re witnessing a record pace of development of new financial products.

“Our goal is to help fast-growing fintech and embedded finance companies more easily launch increasingly innovative and tailored products, expand into new markets and optimise their solutions – so they can grow even faster.”

The Stitch API allows developers to connect apps to financial accounts within minutes, allowing their users to share their transaction histories and balances, confirm their identities, and initiate payments.

Ben Stein, co-founder of The Spruce House Partnership, said he was excited to be a part of Stitch’s future.

“We have been following startups in Africa for many years. Our diligence was very clear that this is one of the most talented teams on the continent,” he said.

Ashish Aggarwal, director at PayPal Ventures, said Stitch was building critical infrastructure to enable faster, easier and more secure payments across Africa.

“We believe they will play a significant role in contributing to the overall growth of the fintech space in Africa – and are excited to be investing at this important moment in their journey,” he said.

This tooling allows companies to innovate with new and improved services including personal finance, lending, insurance, payments and wealth management. Stitch also enables fintechs to work with traditional financial institutions in a safer and more compliant way.

Fintechs took 50% of the funding in 2021

There seems to be a preference for Africa’s fintech sector by investors and the markets alike as it gulped half of the more than US$2 billion raised by tech startups on the continent being sucked into the space.

This is according to the seventh edition of our African Tech Startups Funding Report; 564 African tech startups raised a combined US$2,148,517,500 in 2021.

More so than ever before, fintech is the most popular sector for investments. An extraordinary year saw new unicorns minted, round size records tumble, and fintech startups break the US$1 billion funding barrier, something the African tech space as a whole only managed for the first time in 2021.

These impressive figures were driven primarily by Nigeria, which saw major rounds for the likes of Flutterwave (US$170 million), Kuda (US$25 million and US$55 million), Moove (US$63.2 million) and FairMoney (US$42 million), and accounted for more than half of fintech investment. Egypt’s MNT-Halan (US$120 million) and South Africa’s Yoco (US$83 million) also contributed significantly.

The relentless growth of Africa’s fintech space should not, however, detract from positive developments elsewhere. Non-fintech startups still raised over US$1 billion between them in 2021, with many sectors more than doubling the amount of funding secured the previous year.

E-commerce and retail-tech saw total funding leap 271.5 per cent to US$326,156,000, transport investment grew 102.4 per cent to US$105,445,000, logistics saw an increase of 134 per cent to US$86,751,000, and ed-tech funding jumped 516.3 per cent to US$81,030,000.

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