Kenya based fintech startup, Wapi Pay, has closed a $2.2 million pre-seed funding round to facilitate global payments and remittances between Asia and Africa.
Investors that took part in the round include China-based MSA Capital, which has previously backed unicorns such as Meituan, Nubank and Klarna; Pan African and Africa focused VC firms, EchoVC, Kepple Africa. Previous investors, Future Hub, Gobi Ventures and Transsion Holdings (the parent company of TECNO, Infinix and Itel) also participated in the round.
Founded in 2019 by Paul Ndichu and Eddie Ndichu, the Singapore based, Kenya headquartered startup seeks to make international transfers faster, easier and much cheaper. The startup also has offices in China, Indonesia, India, Japan, Malaysia, Philippines, Taiwan, Thailand and Vietnam, and seeks to expand even further. It also works with local banks and platforms in the said countries.
The World Bank reports that Sub Saharan Africa is the most expensive region to send money to and out. This high cost of remittance in the African region is what Wapi Pay intends to solve, and its primary focus is the Africa-Asia remittance corridor.
Traders usually have to grapple with high remittances fees of up to 15% of the amount, a waiting period of up to five days and are exposed to a high risk of consistent reversals due to unmatched instructions, with Wapi Pay the cost reduces to below 3% and same day payout.
In the first quarter of 2021, China-Africa trade jumped 27% to $52.1 billion compared with 2020. This development is buoyed by the recovery of economies after the coronavirus pandemic.
Expressing his confidence in the startup, Tim Chen, vice president at MSA Capital, said: “Africa to Asia is a large trading corridor overlooked and underserved by tech today. We believe Wapi Pay is the best team to build the necessary infrastructure to support its growing trade volumes. We are excited to support them with our extensive China fintech network and playbook.”
Commenting on the funding, Eddie Ndichu, co-founder at Wapi Pay remarked that “These funds will help Wapi Pay diversify our products range and drive growth so that we can evolve remittances into real-time global cross-border payments, starting with Africa and Asia. All while minimising the cost of transactions, it needs to be as easy as sending M-PESA”
Speaking on the motivation for building Wapi Pay, Paul Ndichu said in an interview with TechCrunch that “we started Wapi Pay having seen how fragmented the payment infrastructure is and how horrifying the experience and expense of making or receiving a payment to and from Asia.” Speaking further, Paul averred that given the high volume of trade between Africa and Asia, they decided to make transactions between these two regions more efficient, faster and cheaper, then evolve from remittance to global payment.
Eddie Ndichu reiterated the company’s ambition to optimise efficiency and effectiveness in its service delivery to users. “Wapi Pay bypasses traditional payment networks, optimising efficiency and cost for our customers. Users choose the delivery channels they want, such as bank to bank, wallet to wallet, bank to wallet and wallet to bank options to transfer funds as well as make merchant payments, with settlement done within 24 hours,” He said.
Added to making payments between Africa and Asia easy and convenient, the platform also supports organisations and institutions in processing bulk payments, including salary payments and business purchases.
This investment reflects strong support for Wapi Pay’s value-for-users approach. Which is to make is Simplest, fastest, cheapest way for African SMEs and businesses to pay in Asia. Funding will help Wapi Pay engage regulators for licensing across Africa, and drive higher and sustained growth.
This non-equity pre-seed raise is one of the largest for Fintech in Eastern Africa and indeed the African region. It will help build value for Wapi Pay’s existing and potential customers by broadening its suite of products.