In the year The emergence of fintechs like Flutterwave and Paystack in 2015 changed the game in Africa by integrating payments into the customer interface without building those features from the ground up or integrating them with external software.
Amplify was another payment platform that started around that time. However, Nigerian Digital Bank Carbon in 2018 When he got his start in 2019, he was interested and differentiated himself by making payments on social media platforms.
At the time, the startup’s founder and CEO, Segen Adeyemi, said he was taking a break and “might start another company” later. While working as the Nigeria country manager for JUMO, a South African fintech that provides credit infrastructure to the largest mobile money operators in Africa, Adeyemi joined another fintech this February, where he took over last year as CEO of Anchor. The new company is similar to Amplify in terms of infrastructure play; However, it offers financial features instead of payment. Adeyemi launched fintech with Olamide Sobowale and Gbeloluwa Olufotebi.
“We are now seeing a new development where businesses want to offer a variety of products and financial services beyond payments,” Adeyemi told TechCrunch on a call. “We strongly believe that the way forward is not just putting banking as a service on a payments platform, but a real banking as a service platform built on the right infrastructure and go-to-market strategy. That’s what we decided to tackle as a team, basically building a complete end-to-end infrastructure for financial services startups.” , you can include and start.
Banking-as-a-service (BaaS) platforms are one of the hottest segments in the global fintech space, with startups like Unite and Rapid hitting unicorn prices and killing off similar services like Stripe. These platforms are becoming increasingly popular with neobanks or upstarts trying to integrate financial services into their offerings in various segments, as large, established banks are relatively slow to bring their services up to speed with the pace of change in technology and the banking world. Likewise, banking-as-a-service platforms see an opportunity to provide more personalized services and flexibility at lower costs.
The situation in Africa is no different. Despite fintech accounting for more than 60% of VC dollars last year and the proliferation of financial services, building a fintech startup is an expensive and time-consuming task. According to reports, launching a fintech on the continent can take up to 18 months and an average of $500,000, from licensing and compliance processes and multiple layers of integration to managing third-party relationships and core banking infrastructure.
Anchor wants to “remove these complexities” so businesses offering pure fintech and embedded finance can launch in 5 minutes, Adeyemi said in a statement. “For startups building a full-scale digital bank or offering embedded finance, we can provide tailored coverage to get them up and running quickly. So our goal from building to embedding to launch is how we can do all of this in the shortest possible time without compromising security, compliance and improvement. That’s our value proposition,” he said. He added the call.
The seven-month-old startup offers tools to help developers embed and build banking products such as bank accounts, money transfers, savings products, issuing cards and lending.
Anchor, which was accepted by Y Combinator’s Summer batch this year as the first banking platform from the continent, went into private beta this May. More than 30 startups have applied, including Pivon, another YC S22-backed company, Outpost Health, Dillali and Pennee. Anchor says he’s growing 200% per month and realizing several million dollars. The startup generates revenue by charging fees and taking deductions from every part of the business: account withdrawals, cash flow, savings and deposits, and more.
After testing these features with a select few, Anchor is coming out of hiding with a $1 million+ pre-seed and unveiling the platform. Anker plans to use this investment to attract top talent, improve the company’s technology infrastructure, invest in compliance and regulatory infrastructure, and acquire customers. Investors backing the BaaS fintech include Byld Ventures, Y Combinator, Luno Expeditions, Niche Capital, Mountain Peak Capital, and angel investors such as SeamlessHR CEO Emmanuel Okeleji.
Meanwhile, Anchor is not the only company trying to simplify how businesses provide financial services in Nigeria and Africa. Other startups like Bloc have identified this same opportunity and big fintechs like Flutterwave They also want to enter that market. Adeyemi argues that the founding team’s technical experience, focus on security and prudence, and the speed at which businesses can move on the platform are of some benefit to Anchor. When the CEO built Amplife, the startup’s CTO Sobowale was a full-stack developer at four prominent Nigerian fintechs: AppZone, TeamApt, Kuda and Carbon, and at Booking.com where Olufotebi built financial operations software.
“There’s a sense of place building this as founders and as a core team. We’ve seen firsthand the painful process of closing banking partnerships, negotiating third-party contracts and obtaining regulatory approvals. And in general, the vast amount of time and effort required to launch financial products,” the CEO said.
“We facilitate speed to market, while at the same time, not compromising on security and scale. So there are many use cases that we have built in, if you are just starting out it will take you some time to get started with the platform.
The CEO pointed out how Anker has created a network effect with its service, saying that the more platforms it adds, the stronger its infrastructure and support system become. Businesses need to consider high switching costs when using BaaS platforms, and being a first mover for a startup like Anchor is a sustainable competitive advantage, he said.