Nigerian fintech, Afriex, raises $10 million in Series A funding

Afriex, the Nigerian payment platform that allows users send and receive money to and from Africa at no cost, has raised $10 million in a Series A funding round.

Nairametrcs reported Tuesday that the company, now valued at $60 million, will use the money to “expand its blockchain money transfer platform.”

The round was led by Sequoia Capital China and Dragonfly Capital, with participation from Goldentree, Stellar Foundation, Exceptional Capital, and others. The new raise comes barely a year after it raised a $1.2 million seed to scale its payments and remittances platform across Africa.

The YC-backed startup, from the Summer 2020 batch offers a product that uses blockchain to enable users send funds by converting them into stablecoins, which are in their most granular form, cryptocurrencies backed by the dollar.

Tope Alabi, who co-founded the company in 2019 with John Obirije, said that their long term goal is to build a service that models that of Visa.

Because we are building this network of connected financial institutions, we have built on-ramps for local Nigerian banks and on-ramps for local currency exchanges.

Tope Alabi

“We are building this web3 mesh of financial institutions that could almost become something like the next Visa.”

Dragonfly Capital managing partner, one of the investing companies that participated in the round, Haseeb Qureshi said that the investment is the right path for the VC, even as it seeks to build a “really strong ground game” in emerging markets like Africa.

“A big strength of Afriex is being able to straddle the entire corridor between the U.S. and Africa where many others have tried to succeed and haven’t,” he said. “The reality is that if you want to succeed in emerging markets you need a really strong ground game.”

Afriex has experienced success over the years, processing upwards of $5 million worth of transactions per month, in part by touting free and quicker transactions as its hallmark.

This raises its popularity amount young Africans, presenting the argument that it’s a better choice than other global businesses offering similar products, like Wise for instance which charges a 6.45% fee for transactions that take longer to complete.