Afriex, a startup backed by Ycombinator has secured $1.2million in seed funding to expand its payment and remittance reach across Africa. The round was led by Pan African VC firm, Launch Africa. Other investors like Y-Combinator, SoftBank Opportunity Fund, Future Africa, Brightstone VC, Processus Capital, Uncommon Ventures, A$AP Capital, Precursor Ventures, and Ivernet Holdings also participated. Angel investors who took part in the round include Russell Smith, Mandela Schumacher-Hodge Dixon, Furqan Rydhan, and Andrea Vaccari.
The startup which is based in Nigeria and Francisco hopes to use this new funding to scale its growing team and expand to other markets.
Founded in 2019 by Tope Alabi and John Obirije, Afriex provides instant, zero-fee transfers to Africans at home and in the diaspora. The platform also allows users to deposit cash on the app, send money to a bank account or another user, and withdraw money to a connected bank or debit card.
Just like every other crypto remittance platform, Afriex’s business model is built on stablecoins cryptocurrency backed by the dollar. In other words, the company buys cryptocurrency in one country and sells it in another to offer better exchange rates. This is in contrast to better-known platforms like Western Union and Wise which use traditional banking systems process transactions.
The company which graduated from Y-Combinator last year claims it processes about $500,000 per month in transaction fees and is used in over 30 countries. The vision of Afriex is to become the fastest and cheapest platform to send money in the world, and it will be expanding its operations to three new countries, namely Ghana, Kenya and Uganda.
Commenting on how the idea of Afriex came about, Alabi explained that his upbringing as an immigrant child gave him a taste of the two worlds, as it was difficult to send money to Nigeria when he was in the United States. With his real life experience of the problem and his experience working as a software developer with Consensys, he was able to develop an insightful solution in Afriex.
“We would go back home every two years and even then, I would always take note of what was missing and what could be improved. I would find myself having to pay for foreign expenses with money that was sitting in a US bank account,”
Afriex has an audacious ambition to build the largest remittance company in the world starting with emerging markets, and the company hopes to do this using cyptocurrency. This funding seed will no doubt go a long way in achieving this vision.