Afriex, a Nigerian payment network that allows customers to transfer money for free throughout Africa, has acquired $10 million in a Series A round of funding.
The startup, which is now worth at $60 million, will use the funds to “grow its blockchain money transfer platform,” according to a source.
Sequoia Capital China and Dragonfly Capital led the round, which also included Goldentree, Stellar Foundation, Exceptional Capital, and others.
The fresh round of funding comes just a year after the company raised $1.2 million in early funding to expand its transactions and exchange platform across Africa.
The Summer 2020 batch YC-funded firm offers a tool that uses blockchain to allow customers to send payments by transforming them into stablecoins, which are digital currencies backed by the dollar in their most granular form.
Founders of the organization, Tope Alabi with John Obirije in 2019, said their long-term goal is to create a service similar to Visa’s.
“We’ve established on-ramps for indigenous Nigerian banks and on-ramps for local foreign exchanges because we’re developing this system of interconnected financial institutions,” they said.
“We’re putting up a web3 mesh of credit institutions that could end up being the next Visa,” added Tope
Haseeb Qureshi, the managing partner of Dragonfly Capital, one of the contributing companies in the round, said the financing is the appropriate path for the VC as it tries to create a “very solid ground game” in emerging sectors like Africa.
“Afriex’s ability to cross the whole corridor between the United States and Africa, where several have attempted and failed,” he said. “The reality is that you need a really solid ground game to thrive in emerging markets.”
Afriex has grown in popularity well over years, handling upwards of $5 million in transactions per month, thanks in part to its emphasis on free and faster transactions.
This boosts its appeal among young Africans, arguing that it is a better option than other worldwide corporations offering comparable services, such as Wise, which charges a 6.45 percent fee for operations that take more time to execute.
Afriex is one of a wave of African businesses that are focused on underserved and sometimes overlooked customers.
According to CB insights, African fintech startups received more than $1.4 billion in investment in 2021, about 7 times more than in 2020.
In the last six months, Afriex’s client base has grown by 500% with half of its active customers visiting the site more than once in a week.
The firm generates revenue by arbitraging cash and cryptocurrency exchange rates when a customer Carrie’s out a transaction. Afriex has remained tight-lipped about its earnings
In May, it raised $1.3million in a seed round before securing this recent $10million in Series A funding.
Afriex would concentrate on its main money product and focus the seed round to developing a StableCoin and scaling the platform in the coming months.
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