Nigerian Fintech Platform, Anchor Announces The Raise of $2.4 Million Seed Fund to Expand Product Offerings
Anchor, a Nigerian banking as-a-service platform that lets users embed accounts, cards, payments lending, and other financial features, has announced the raise of $2.4 million in seed investment to expand product offerings.
The seed round was led by Goat Capital with participation from founders, Rebel Fund, Pioneer Fund, Y Combinator, Byld Ventures, and Future Africa, among others.
Anchor’s recent seed raised, is coming after a year when the company came out of stealth with over $1 million in pre-seed funding to scale its banking-as-a-service platform.
The startup partners with regulated banking institutions to provide APIs, dashboards, and tools to assist developers in embedding and funding banking solutions. It also helps businesses to access high-quality financial data and direct bank payments.
Speaking on the new funding, Anchor CEO Segun Adeyemi said,
“We’ve been fortunate to have been able to just grow the platform very quickly, which we believe confirms that there was actually a problem to be solved. And there is a need, and we just want to double down with this new funding.
For Anchor, the startup’s initial objective was to encourage embedded financing for big supermarkets and multinationals in Nigeria. Thereafter, the company recognized a huge potential to connect these companies online and power their financial service offerings, but it didn’t go as planned after it realized most of the companies weren’t digitally ready.
“We realized they weren’t digitally ready yet. We figured that most of them would take three to four years to properly onboard or even get them to the stage where they can maximize their accounts with embedded finance.
As a startup, we had to realize we didn’t have the luxury of waiting for customers. So, we had to change and hyper-focus on digitally ready and tech-enabled businesses.” the company CEO added.
Anchor says it has recently signed a partnership with MTN’s Fintech subsidiary MoMo PSB which it hopes will surpass its previous growth numbers.
The startup went live in August last year with roughly 30 clients in various onboarding phases. Its current total is around 270, with approximately 63 of these firms online and actively transacting on the platform.
Anchor’s clientele includes fintech, SaaS firms, e-commerce enterprises/marketplaces, and other tech-enabled businesses. Bujeti, Pennee, SeamlessHR, LifeBank, Waza, and Zit.ng are a few of its customers.
So far, the YC-backed fintech claims to have generated more than $550 million in annualized total transaction volume (TTV) by enabling fintech services for these enterprises. Likewise, it is increasing revenue by 30% month-on-month, according to the chief executive. Processing fees, issuance fees for accounts and cards, and interest income on the float generate revenue for the firm.
As embedded finance grows to become the latest trend in the world of financial technology companies that broadly follows the spirit of fintech-enabling reforms like Open Banking, to allow non-financial providers to offer payment, savings, insurance and other financial services to their consumers, users, or businesses.
The global embedded finance market has been projected to be worth $384.8 billion by 2029, and Africa will account for 10% of the industry.
Notably, Anchor’s growth rate has been impressive showing signs of becoming the category leader. The startup seeks to tap into the capture market share.
It is worth noting that Anchor is also in discussions of exploring pan-African expansion. The company is on a mission to enable any organization in Africa to offer simple and contextual financial products to their customers.
