Nigerian Finance Startup Anchor Receives $2.4 Million Investment

Anchor, a Nigerian banking-as-a-service (BaaS) provider, has raised $2.4 million in seed investment. The round was led by Justin Kan's Goat Capital. At the same time, the round also saw participation from some existing investors, including FoundersX, Rebel Fund, Y Combinator and Byld Ventures. Anchor claims to help businesses reduce the process of creating banking products from years to days. When the fintech was first established, it only addressed customer accounts. But according to Anchor co-founder and CEO Segun Adeyemi, Anchor's APIs now also support merchant accounts, card issuance, bill payments, bulk payments, cross-border payments, and developer-only features such as an audit logging system and developer webhooks.

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Investment in Anchor Company

Anchor launched in August last year with around 30 clients in various stages of engagement. The current total is around 270, with around 63 of these firms online and actively trading on the platform. Clients include fintechs, SaaS firms, e-commerce businesses/marketplaces and other technology-enabled businesses. Bujeti, Pennee, SeamlessHR, LifeBank, Waza and Zit.ng are some of its clients. Anchor's initial goal was to promote onshore financing for large supermarkets and multinationals in Nigeria. According to Adeyemi, the startup realised the huge potential in connecting these companies online and strengthening their financial service offerings. However, it did not go as planned.

According to Adeyemi, this was one of the most notable lessons the market taught Anchor after its first year. Others include determining appropriate pricing, developing revenue streams that will positively impact customers' profitability, and redesigning compliance processes. The one-year-old fintech will, therefore, double its focus on these areas following this injection of funds. "We want to improve our end-to-end compliance system, invest in value-added products such as our ledger system and bring in more customers," Adeyemi said.

The global embedded finance market is expected to be worth $384.8 billion by 2029. Africa will account for 10 per cent of this sector. Anchor states that it serves a $7 billion addressable market in Nigeria. There are several growth paths Anchor can use to capture market share. First of all, its recent partnership with the fintech arm of MTN, Nigeria's largest telecommunications company.