Nigerian fintech, Anchor, has secured $2.4 million in seed funding from investors including Goat Capital, FoundersX, and Rebel Fund. The banking-as-a-service provider offers APIs, dashboards, and tools to facilitate the development of banking solutions for businesses. With over 270 clients and $550 million in annualized total transaction volume (TTV), Anchor aims to enhance its compliance system, invest in value-added products, and expand its customer base. The startup is serving a $7 billion addressable market in Nigeria and is looking to explore pan-African expansion.
Anchor, a Nigerian banking-as-a-service (BaaS) provider, has raised $2.4 million in seed investment. The funding round was led by Goat Capital, with participation from FoundersX, Rebel Fund, Y Combinator, and Byld Ventures.
Anchor emerged from stealth mode in 2020 with over $1 million in pre-seed funding. The fintech focuses on enabling developers to embed banking solutions by providing APIs, dashboards, and tools. It competes in the Nigerian market alongside other BaaS providers like JUMO, Maplerad, OnePipe, and Bloc.
Traditional banks have been slow to embrace digital banking, creating opportunities for BaaS providers. These platforms allow neobanks and other businesses to integrate financial services into their products more easily. With lower costs and increased flexibility, BaaS providers can deliver personalized services to meet the evolving needs of businesses.
Anchor differentiates itself by partnering with regulated banking institutions, enabling businesses to expedite the process of building banking products. The fintech initially focused on customer accounts but has expanded its API offerings to include business accounts, card issuance, bill payments, bulk disbursements, cross-border payments, and developer features such as an audit log system and developer webhooks.
Since its launch, Anchor has gained approximately 270 clients, with 63 actively transacting on the platform. Its clients include fintechs, SaaS firms, e-commerce enterprises, and tech-enabled businesses such as Bujeti, Pennee, SeamlessHR, LifeBank, Waza, and Zit.ng.
The fintech has generated over $550 million in annualized total transaction volume (TTV) and is experiencing a 30% month-on-month increase in revenue. Its revenue streams come from processing fees, account and card issuance fees, and interest income on the float.
Anchor aims to drive financial inclusion by offering online onboarding to non-digital native firms. However, the startup realized that big supermarkets and multinationals in Nigeria were not yet digitally ready. This insight led Anchor to shift its focus towards digitally ready and tech-enabled businesses to maximize their accounts with embedded finance.
The funding injection of $2.4 million will allow Anchor to enhance its end-to-end compliance system, invest in value-added products like its ledger system, and onboard more customers. The startup's recent partnership with MTN, Nigeria's largest telecom, provides an avenue for expansion. Anchor is also exploring pan-African expansion opportunities, considering the rapid growth of the embedded finance market in Africa.
Justin Kan, partner at Goat Capital, expressed optimism about the startup's potential to become the category leader in the nascent but fast-growing embedded finance market in Africa.
Source of content: OOO News 2023-09-04 News
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