Lemonade Finance, a startup that allows Africans abroad to send and receive money from home has announced a $725,000 pre-seed funding raise.
According to the startup, the funding round had participation from the American startup accelerator, YCombinator, and Venture Capital firms, Microtraction, Ventures Platform, and Acuity Venture Partners. The round was also backed by involvement from several other individual investors.
Lemonade Co-founder, Ridwan Olalere told Technext in an interview that the new fund will enable the team to improve its bench, strengthen the app’s features as well as increase the countries of coverage.
Lemonade was launched last year when former Opay staff, Rian Cochran and Ridwan Olalere while working on a project, identified the need to solve the payment problem that many Africans in the diaspora face. The fintech product they came up with is helping Africans send and receive money from their home countries in efficient, affordable, and fast ways.
Asked about the prospects for the startup in an industry with other players like ChipperCash, Fliqpay and Afriex, Ridwan explained that Lemonade stands out because it allows users to hold their balances in the currencies that matter to them.
“The existing remittance options, some of which are led by big players, are not nimble enough. For instance, many Africans abroad own businesses back home and need to hold money in two currencies. They also need to move such funds quickly, sometimes for needs and purposes that are urgent,”Ridwan Olalere
“A Nigerian user of Lemonade in the U.K can hold the Pound Sterling and the Nigerian Naira, easily converting one to the other. Users can also transfer the money back and forth from Nigeria without needing to wait days”, he concludes.
The startup’s co-founders, Ridwan Olalere and Rian Cochran say that this flexibility is intentional and has been at the core of the team’s thinking in building the app.
Ridwan also spoke about the efficiency of the platform which he claims can be backed by a number of testimonials by Nigerians especially in Canada:
“Before Lemonade, international money transfers that should take minutes took days. Those are hours of stress and anxiety for you and your family while your money is stuck in transit. It also makes it difficult for many Africans abroad, who own businesses, to keep those ventures running. We are solving that with great rates and instant transfers across borders. It is a game-changer for the African diaspora.”
Recall that Lemonade was one of the 9 African startups that joined the Y Combinator Summer 2021 (S21) cohort in June.
We asked about how that has influenced the team’s development and efficiency and Ridwan said that “it has been an exciting experience. They challenged our thought process and helped us craft a more focused approach to the problem we are solving. Then, the network community has been amazing.”
Microtraction and Ventures Platform, say they’re confident of the critical nature of Lemonade’s solution. Dayo Koleowo, Managing Partner at Microtraction said in a statement:
“Lemonade’s solution is very timely. As a multi-currency financial service provider, they make it easy for the African diaspora to send and receive money from their new country of residence, which is remarkable. We believe Rian and Ridwan have the technical and financial know-how to provide the number 1 cross-border neo-bank for Africans in the diaspora.”
Lemonade Finance is live in Canada, a country with a growing population of Africans. Ridwan said that the company is set to launch in the UK, another country with a significant population of African citizens. He hinted that the team is planning on going live in Ghana soon.
Kayode Oyewole, a partner at Ventures Platform also said:
“We are excited to back Ridwan, Rian and the Lemonade team, who have built a compelling financial product to serve the more than 100 million Africans in the diaspora, who today have limited access to great financial products. The founders are rockstars with deep experience building and scaling products to reach millions of users.”
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