Nigerian fintech startup, Cleva, has raised $1.5 million in a pre-Seed round to expand its business of helping African individuals and businesses receive international payments by opening USD accounts.
The round was led by 1984 Ventures, an early-stage venture capital firm based in San Francisco. Other participants in the round include The Raba Partnership, Byld Ventures, FirstCheck Africa, and several angel investors. Y Combinator also participated in Cleva’s pre-seed round as the fintech begins its involvement in the accelerator’s winter 2024 batch this month.
Cleva operates in the same market that has competitors like Geepay and Payday. The YC-backed startup, which generates revenue when users swap and exchange their funds (in USD accounts) for the local currency (in naira for now), also charges a 0.9% fee on deposits into customers’ USD accounts. Notably, Cleva caps fees at $20, distinguishing itself from competitors who often apply an uncapped 1% fee regardless of the amount received.
Investors’ confidence
Commenting on the funding, Aaron Michael, a partner at 1984 Ventures, the lead investors, expressed support for Cleva’s founders, Tolu Alabi and Philip Abel, noting that their product provides a means for Africans to navigate hyperinflation challenges, which he describes as a massive opportunity.
- “The team is uniquely qualified to address this given their experience building banking products at Stripe and robust platforms at AWS. The impressive early growth is a testament to the team’s unique capacity to execute across Africa and the U.S.,” he added.
Speaking on the company’s business, Tolu Alabi said:
- “The problem that we’re trying to solve, which is enabling people to receive international payments, is not a Nigerian problem nor an African one. It’s a global problem; people in Latin America, Asia, and even Canada need to receive dollars for their work and service. We’re starting with Nigeria because we know the market and it’s also a big market. But we feel like because of our backgrounds, we’re very well positioned to solve this problem at a global scale.”
The founders
Founded by Tolu Alabi and Philip Abel (MIT and Standford alums respectively) in 2023, Cleva’s product provides a means for Africans to navigate hyperinflation challenges.
Africans face persistent challenges in receiving international payments for their skills and products. It is estimated that the market for facilitating payments for remote workers and freelancers in Africa to be an $18 billion opportunity.
Born and raised in Nigeria and moved to the US on college scholarships, both founders bring valuable technical and product experience from their roles at major tech companies, including Amazon, Stripe, AWS, and Twilio.
- Initially launched its services to Nigerians, US- and Nigeria-based Cleva lets users open USD accounts, with onboarding requiring a Bank Verification Number (BVN) and a government-issued ID.
- The fintech has facilitated the opening of US-based accounts for thousands of Nigerians, processing over $1 million in monthly payments while experiencing month-on-month revenue growth of 100%.