A new Nigerian fintech company, Okra, has had a unique mix of successes in less than a year.
The Lagos-based API The developer has developed a product that generates revenue from both payment startups and established financial institutions.
Okra has raised $ 1 million in pre-seed funds from TLcom Capital – a $ 71 million Africa-based VC company that rarely invests in early-stage companies or fintech.
The startup is also ready to open up new markets and hire new employees.
Okra was founded in June 2019 by Nigerians Fara Ashiru Jituboh and David Peterside and acts as a motherboard for the continent's financial system in the 21st century.
“We are building a super connector API that enables individuals to connect their bank accounts directly to third-party applications. And these are their African bank accounts that start in Africa's largest market, Nigeria, ”said Ashiru Jituboh.
As a sector, fintech has become the continent's most financed technology area, receiving most of the estimated $ 2 billion in VC that went to African startups in 2019. These companies and a number of the continent's established banks are in a race to build market share through financial inclusion.
According to several estimates – including the Global Findex Database – the continent is home to the largest percentage of the world's population without banks, with a significant number of consumers and SMEs under banking.
With 54 countries, 1.2 billion people and thousands of relatively young startups, there are many moving parts in the African fintech sector. Similar to the US company Plaid, Okra designs a platform that combines accounts and financial data with banking apps into a revenue-generating product.
With Africa's largest population of 200 million people, Nigeria is an important financial hub. According to Ashiru Jituboh from Okra, however, there is still a separation between fintech apps and banks.
"Here in this market, there is no way to connect your bank account directly through an API or directly to an application," she said.
Okra offers several paid packages for these types of integrations and opens the code to developers in its five product categories – authorization, balance, transactions, identity and accounts.
Okra has already created a diverse customer list that includes the start-up PalmPay for mobile payments, the insurer Axa Mansard and the Nigerian digital lender Renmoney.
According to Ashiru Jituboh, the startup generates revenue from product fees and earns every time a user connects a bank account to a customer.
Regarding how Okra differs from other well-funded fintech companies in Nigeria like Flutterwave or Interswitch, the answer is: "We don't make payments, but we make the processes with (payment providers) even smoother." She said.
Ashiru Jituboh comes to her CEO position with a background in software development and a strong connection to the United States. She was born in Nigeria and grew up in North Carolina and studied computer science.
She worked in finance – JP Morgan Chase and Fidelity Investments – and then in technology companies before they take the plunge into founders. "I worked in startups, but I was always number two or three," said Ashiru Jituboh.
When she returned to Nigeria, she chose Okra and found that the country's new digital financial infrastructure needed to be connected.
"When we knew it was a large addressable market, we found that all of these fintech CEOs and CTOs were struggling with this use case," she said.
Shortly after its launch, Okra caught TLcom Capital's attention in the second quarter of 2019, according to VC Andreata Muforo.
With offices in London, Lagos and Nairobi, the group closed its $ 71 million Tide Africa fund this year. TLcom has primarily focused on Series A and later investments, including support from Kenya The agtech startup Twiga Foods and the Nigerian truck logistics company Kobo360.
In an interview last year, the fund's managing partner, Maurizio Caio, said TLcom is steering more towards investing in infrastructure-oriented technology companies and away from Africa's more standardized payment and credit startups.
The VC company was attracted to Okra because it was able to serve the continent's broader financial sector. "It is a service that other fintechs can and can use to accelerate the growth of fintech across the continent. It was a big catch for us," Andreacom Muforo of TLcom told theinformationsuperhighway on a call.
Founder Fara Ashiru Jituboh was also a factor in the fund making a $ 1 million pre-seed investment in Okra. "We found her very strong and also liked that she was a technical founder," said Muforo. As part of the investment, you and TLcom Capital Partner have Ido Sum will join the board of Okra.
The startup not only hires new engineers, but also wants to bring its product offerings, which combine bank accounts with apps, to new African countries – but without specifying where or when.
"We are looking at three target markets where our customers are already," said Ashiru Jituboh. Okra investor Andreata Muforo named Kenya – with one of the world's highest penetration rates for mobile money – as a likely candidate for the startup's product services.