NIGERIA – Afriex, a Nigerian blockchain-based money transfer startup has secured US$10 million series A funding round to expand its blockchain money transfer app.
The round was led by Sequoia Capital China and Dragonfly Capital with participation from Goldentree, Stellar Foundation, and Exceptional Capital, among others.
The startup will use the funds to develop a stable coin and has already partnered with Visa to offer credit and debit cards to Afriex users later this year.
Founded in 2019 by Tope Alabi and John Obirije, Afriex provides instant, zero-fee transfers to Africans at home and in the diaspora.
It allows 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 Alabi, the startup will be able to give people in Africa a place to store their money that doesn’t fluctuate or get impacted by external forces as much as the current currencies do.
”Because we are building this network of connected financial institutions, we have built on-ramps for local Nigerian banks and on-ramps for local currency exchanges,” said Tope Alabi.
“We are building this Web3 mesh of financial institutions that could almost become something like the next Visa.”
The startup makes its money by arbitraging the currency and crypto exchange rates when a customer transacts.
The new funding comes a year after it raised US$1.3 million in a seed round valuing the startup at US$60 million.
The firm processes more than US$5 million in monthly transfers and has grown its customer base by 500 percent in the last six months with half of its active users using the platform more than once a week.
Data from CB Insights found that more than US$1.4 billion was invested into African fintech companies in 2021, a nearly 7x increase over 2020.
One possible reason these companies are gobbling up capital is that they are seeing strong traction triggered by the Covid-19 pandemic.