Y Combinator-backed fintech startup, Afriex, a platform that provides instant, zero-fee transfers to Africans at home and in the diaspora has raised $1.2 million in its seed funding round.
The seed round was led by Pan-African VC firm, Launch Africa. Other investors include Y Combinator, SoftBank Opportunity Fund, Future Africa, Brightstone VC, Processus Capital, Uncommon Ventures, A$AP Capital, Precursor Ventures, and Ivernet Holdings. Angel investors like Russell Smith, Mandela Schumacher-Hodge Dixon, Furqan Rydhan, and Andrea Vaccari also took part.
Founded in 2019 by Tope Alabi and John Obirije, the startup’s platform allows users to deposit cash on the app, send money to a bank account or another user, and withdraw money to a connected bank or debit card.
Sending money overseas is slow and expensive, Afriex is solving this problem by buying cryptocurrency in one country and selling it in another to offer better exchange rates and faster transfers than banks or other transfer services.
The company is based in the United States and Nigeria and has already processed millions of dollars in payments each month for thousands of Africans in the diaspora and on the continent, and grew 20X in 2020.
Afriex took part in Y Combinator’s Summer 2020 Cohort. The startup was Initially active only in the US and Nigeria, but it has now started operations in three new countries, namely Ghana, Kenya, and Uganda,
This new funding will be used to grow its team and expand into further new markets, speeding its vision to be the fastest, cheapest way to send money to anyone in the world.
What they are saying
Temitope Alabi, Founder and chief executive officer (CEO) said, “I would find myself having to pay for foreign expenses with money that was sitting in a US bank account. Traditional remittance companies were so slow and expensive that I knew I could do it better with crypto.”
“Remittance is the best and most important use case for crypto. Our goal is to build the world’s largest remittance company starting with emerging markets.”
Whereas the likes of Western Union and Transferwise (now Wise) built their businesses on top of the traditional banking system, Afriex uses stablecoins – cryptocurrency backed by the US dollar. This means it can charge lower fees, and transfer funds faster, in minutes as opposed to days.
“We don’t have to hold inflationary currencies – we can just hold USD and crypto allows us to source better exchange rates,’‘ Alabi added.