CrowdForce, the Nigerian and Y Combinator-backed agency banking company, announced Wednesday, that it had acquired $3.6 million in pre-series A funding to expand its capital access to people in underprivileged regions.
The recent funding round was led by Aruwa Capital Management with participation from HAVAÍC and AAIC and is a split between equity and debt. The company plans to utilise the funds to triple the size of its PayForce agent network this year while also expanding its financial services to neglected Nigerian areas.
CrowdForce is a financial services distribution platform that can turn any merchant into a mobile bank branch within minutes. The company boasts the most liquidity, leveraging over ₦1.7 trillion through its partners.
According to CrowdForce, it wants to triple the number of active agents it has this year, and plans to achieve that by distributing more point of sale (PoS) terminals to small companies that operate as mobile bank branches, such as petrol stations, pharmacies, and aggregators/resellers.
Financial services are still difficult to get by in Nigeria, a gap CrowdForce intends to bridge. Less than 1/3 of Nigerian individuals have access to a bank branch or ATM within one kilometre of where they reside.
Unreliable infrastructure erodes confidence in the financial system; not forgetting that around 15% of card transactions fail at the point of sale.
“Fintechs and challenger banks are emerging in Africa to deliver better financial services via digital rails. It’s a fantastic development in the market, but cash is clearly still king in Nigeria. 97% of retail transactions happen offline. There is a clear need to build an offline distribution network to enable fintechs and challengers to reach the mass market – this is exactly what we’re doing at CrowdForce. and this round will accelerate our momentum even more”.Oluwatomi Ayorinde, CrowdForce CEO/co-founder
The inclusion conversation
Prior to the establishment of CrowdForce, co-founders Oluwatomi Ayorinde and Damilola Ayorinde developed MobileForms, a data analytics platform that provides corporations, NGOs, and development groups with information on hard-to-reach rural and semi-urban communities.
In 2018, MobileForms completed KYC for the Nigerian government’s TraderMoni small loan program for 4.5 million qualified merchants. Later, it shifted its focus to financial services and changed its name to CrowdForce.
Data analytics is used by CrowdForce to provide financial service offerings that really address financial inclusion. Its PayForce system is a POS-enabled system that offers ATM, transfer, and bill payment services.
PayForce assists retailers in properly managing their cash float while also allowing them to make additional money by serving as an agent. PayForce is present in market clusters and small enterprises since both are capable of meeting significant cash demand from clients in regions where banks have historically been absent.
CrowdForce has been cash positive since 2020 and has served 1.9 million unique customers in 25 Nigerian states. The company’s user base has expanded by 25% month over month.
According to the company, it has also collaborated with cash-heavy small companies for the last three years, transforming them into mobile bank branches while safely holding their cash in a PayForce digital wallet.
To expand its distribution network, the company has worked with 19,000 gas stations, 20,000 resellers, and 7,000 pharmacies. Thanks to the company’s innovative solutions, Nigerians are now able to access financial services within one kilometer, or 15 minutes.
Speaking on the latest funding round, Adesuwa Okunbo Rhodes, Founder and Managing Partner at Aruwa Capita, remarked how excited the company is to be working alongside CrowdForce to deepen financial inclusion in the country.
“We are excited to lead this investment in CrowdForce. We see significant value in the product as it is solving a real problem by providing access to critical financial services in rural areas that have been overlooked by traditional financial institutions. CrowdForce is actively deepening financial inclusion through its products and services, and has unique competitive advantages through its proprietary technology and extensive agent distribution network across the country”.Adesuwa Okunbo Rhodes, Founder and Managing Partner at Aruwa Capita,
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