Nigerian open banking fintech Okra raises $1m from TLcom
Okra, the Nigerian fintech helping third parties connect to African bank accounts, has landed $1 million in pre-seed funding from TLcom Capital, a Lagos, Nairobi and London-based VC.
Lagos-based Okra, an application programme interface (API) developer which launched in January, says it will use the fresh capital “to build the infrastructure for Africa’s next wave of fintech innovation”. This will include growing its team as it acquires more clients.
Backer TLcom will see its partners Andreata Muforo and Ido Sum join Okra’s board as a borad member and a board observer respectively as part of its investment.
Founded last summer by Nigerians Fara Ashiru Jituboh and David Peterside, Okra generates its revenue from payment start-ups and major financial institutions.
Much like US-based API developer Plaid, Okra retrieves real-time financial data from bank accounts and feeds it to web and mobile apps.
Historically, a big pain point for start-ups in Africa has been payment integration. Major mobile money provider M-Pesa launched its API Daraja in 2017, initially to businesses in Kenya, allowing them to integrate with M-Pesa’s products faster.
Mobile money providers are fast becoming a popular alternative to banks in Africa. FinTech Futures spoke to Orange Money, which had 396 million registered mobile money users at the end of 2018, accounting for roughly 11.4% of Africa’s market.
Without APIs to mobile money providers or banks, start-ups have to receive payments outside the app, leaving little control over cash flows and scalability.
“How far the African fintech sector can grow is intrinsically tied to the success of an infrastructure like Okra and with our core market in Nigeria, we’re opening the door to another level of innovation in Africa’s largest market,” says Jituboh.
Okra says there are 125 million bank accounts in Nigeria, but according to Nigeria Inter-Bank Settlement System (NIBSS) 36.5% (45.57 million) of these accounts were inactive at the end of December 2019.
This means there are roughly 79.28 million active bank accounts in the country.
Jituboh says this number will “rise exponentially” over the next two years. “Our role within this is to deliver ease, speed and transparency to key players within the fintech space so they can get back to driving our continent forward.”
Okra says it has connected to all Nigeria’s commercial banks, as well as credit service Branch, AIICO Insurance, Travelstart, investment app Bamboo, lender Renmoney and small business financer Swipe.
The fintech says it can onboard clients in less than 24 hours and has seen a 175% spike in demand during the coronavirus as more companies feel the pressure to digitise their services.