Y Combinator-Backed Crypto Remittance Platform Raises $1.2M Seed Round To Expand Across Africa
Temitope Alabi, founder and CEO of San Francisco- and Nigeria-based crypto remittance platform Afriex. Photo provided
Afriex, a Y Combinator-backed fintech start-up that provides instant, zero-fee money transfers to Africans in the diaspora, raised $1.2 million in a seed round from venture capital funds that it plans to use to scale up payments and remittances across Africa.
The funding, led by Africa-focused VC fund Launch Africa, will go toward increasing staff and entering new markets with large numbers of African immigrants.
Afriex runs a similar model to other crypto remittance platforms and bases its business foundation on dollar-backed stable coins. However, it differs from other remittance platforms operating in Africa such as Western-Union and TransferWise, whose models are based on traditional banking systems.
Its app provides person-to-person money transfer services that it says enable users to easily deposit cash on the app, then transfer the money to another user using cryptocurrency. The company has reported growth of 20X in 2020 alone.
“Remittance is the best and most important use case for crypto. Our goal is to build the world’s largest remittance company starting with emerging markets,” said Temitope Alabi, Afriex co-founder and CEO.
“Sending money overseas is still slow and expensive,” Afriex said in a statement. “Afriex fixes this by buying cryptocurrency in one country and selling it in another to offer better exchange rates and faster transfers than banks or other transfer services.”
Other angel investors include Future Africa, Uncommon Ventures, SoftBank Opportunity Fund, Precursor Ventures, Ivernet Holdings, Y Combinator, A$AP Capital, and Brightstone VC.
Based in San Francisco and Nigeria, the fintech startup started operations in 2019, before expanding to Ghana, Kenya and Uganda.
Afriex claims to move $500,000+ worth of transaction fees every month and is widely used in 30 countries, according to TechCrunch.
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