AFRICA – Stax, a firm that uses automated USSD codes to enable Africans to buy airtime, send and receive funds, and move payments between accounts, has acquired US$2.2 million seed round.
The latest seed round was led by World Within Ventures and Noemis Ventures with participation from Anthemis Group, Orange DAO, 500 Startups, Garuda Ventures, and GAN Ventures.
The startup gathers numbers from numerous accounts that customers can access offline, allowing them to conduct purchases without dialing any USSD codes.
Stax promotes itself as a distributed team, with employees based in the United States, the United Kingdom, Nigeria, and Kenya.
Its platform is active in ten African markets, but it completely serves six countries: Kenya, Uganda, Tanzania, Nigeria, Ghana, and Ethiopia, where consumers may access over 100 banks and mobile money accounts.
Last year May, the platform was released from beta. In its initial month, it had fewer than 3,000 monthly active users, but it has since expanded to over 170,000 customers, with just 40,000 of them being active monthly users.
Customers only need to give Stax permission to send and see messages, access contacts, and initiate and manage phone calls when they download the program.
The permissions given do not reveal personal information about users, in the event of a breach, hackers are unable to hurt users, do anything with stolen data, or move money.
The great majority of the poor are still excluded from smartphone applications that connect consumers with providers via the internet.
Dialing a shortcode is the initial user interface for mobile money and mobile banking, and many people prefer it because it can be done on the go, is usually faster, and does not require internet.
Banks are using USSD to enable financial inclusion because it offers an alternative for those who do not know how to use the online banking system.
This mass market is dominated by telecommunications companies and banks, which provide the technological infrastructure that enables these code-based transactions.
Stax intends to introduce various features along the way, including a self-custody crypto wallet that will start with USDC, allowing customers to purchase airtime while dialing non-financial digits.
The platform plans to develop more capabilities and expand its services from 10 to 50 African countries and into Asia.