Afriex raises $10m to expand blockchain money transfer in Africa
By Jeph Ajobaju, Chief Copy Editor
Fintech Afriex has closed a $10 million Series A deal to expand blockchain money transfer platform across the African continent.
The startup, valued at $60 million, utilises blockchain to enable users send funds by converting them into stablecoins – cryptocurrencies backed by reserve assets.
This process makes the transaction free and quicker than an existing service like Wise which charges a 6.45 per cent fee and can take a few days to process.
Afriex was launched in 2019 by Tope Alabi and John Obirije. It raised a $1.3 million seed round in May 2021.
The latest funding was financed by Sequoia Capital China and Dragonfly Capital with participation from Goldentree, Stellar Foundation, and Exceptional Capital, among others.
Afriex launched among an explosion of fintech firms targeting underserved and often overlooked, consumers in Africa. CB Insights data shows that more than $1.4 billion was invested in African fintechs in 2021, about seven times above 2020.
Fintechs raised more than half the total $2.2 billion venture capital funding across the continent in 2021. One reason these companies are gobbling up capital is their strong traction.
Afriex processes more than $5 million in monthly transfers, Wise moves an average £4 billion ($5.2 billion). But Afriex has grown its customer base by 500 per cent in the last six months with half of active users using it more than once a week.
The startup makes money by arbitraging the currency and crypto exchange rates when a customer transacts. Afriex declined to share its revenue.
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Safe money storage
According to Nairametrics, while hoping that Afriex will be able to give people in Africa a place to store their money without fluctuation or impact of external forces as much as current currencies face
“Because we are building this network of connected financial institutions, we have built on-ramps for local Nigerian banks and on-ramps for local currency exchanges.
“We are building this web3 mesh of financial institutions that could almost become something like the next Visa,” Alabi explained.
Haseeb Qureshi, Managing Partner at Dragonfly Capital, one of the investors, said: “A big strength of Afriex is being able to straddle the entire corridor between the U.S. and Africa where many others have tried to succeed and haven’t.
“The reality is that if you want to succeed in emerging markets you need a really strong ground game.”