Anchor, a fintech startup founded by Segun Adeyemi – a former country manager for South African fintech JUMO, alongside Olamide Sobowale and Gbekeleke Olufotebi has raised $1 million in pre-seed funding. The round received participation from Byld Ventures, Y Combinator, Luno Expeditions, Niche Capital, Mountain Peak Capital, and investors such as SeamlessHR CEO Emmanuel Okeleji.
Unlike most fintech startups, Anchor focuses on providing financial features instead of payment features. Explaining this, Segun Adeyemi said that “We’re now seeing a new development where businesses want to offer different products and financial services beyond just payments. We strongly believe that the way is not just by latching banking-as-a-service on a payments platform, but there has to be proper banking as a service platform built with the right infrastructure and go-to-market strategy. That’s the problem we decided to solve as a team, basically the full end-to-end infrastructure for startups to be able to build, embed, and launch financial services.”
Currently, banking-as-a-service platforms are one of the most sought-after fintech categories across the globe. They are popular amongst neo or challenger banks trying to disrupt the financial space with their offerings which are mostly digital and popular amongst the younger generation. Besides, the traditional banking system has been slow to bring its operations up to speed with technology, hence these neobanks thrive in the financial space. For banking-as-a-service providers, this is an opportunity to provide more personalized services and flexibility at affordable prices.
Anchor wants to help fintechs to reduce the complexities and costs associated with operating and providing services by offering a banking-as-a-service solution that these other startups and businesses providing embedded finance can integrate with their platforms. “For startups building a full-scale digital bank or providing embedded finance, we can provide compliance covering that allows them to launch quickly. So from build to embed to launch, our goal is how can we do all of that in the shortest time possible without compromising on security, compliance, and scalability. That’s our value proposition,” co-founder Segun Adeyemi said.
Anchor provides APIs, dashboards, and tools that developers can embed and build banking products such as bank accounts, funds transfers, savings products, issuing cards, and loan services.
It is pertinent to know that Anchor participated in Y Combinator’s summer batch accelerator program and is Africa’s first banking-as-a-service startup. The startup went live with its private beta in May and was accessed by more than 30 startups, including Outpost Health, Pennee, Dilali, and Pivo, another YC S22-backed company.
Anchor says it is transacting several millions of dollars and is growing 200 percent month-on-month. The company makes revenue by charging fees and commissions from every billable aspect of the business including account issuing, money movement, savings, and deposits. Anchor’s latest funding brings the company out of its stealth mode.
Anchor highlights its founding team’s technical experience, attention to security and scalability, and the speed at which businesses can go live on its platform, as what makes it stand out against rivals like Bloc which are trying to signify how businesses offer financial services in Nigeria and Africa. The company Chief Technology Officer had a rich experience in fintech having worked in four of Nigeria’s prominent startups namely AppZone, TeamApt, Kuda, and Carbon. The third founder Gbekeleke Olufotebi was a full stack developer at Booking.com, where he built financial operations software.
“There’s an understanding of the space as founders and the core team building this. We have seen first-hand the painful process of closing banking partnerships, negotiating third-party contracts, and obtaining regulatory approvals. And more generally, the extensive time and effort required to launch financial products,” CEO Segun Adeyemi said adding that “We optimize for speed of go to market while at the same time, we don’t compromise on security and scalability. So there are a lot of use cases we’ve built for, that if you start from scratch, it will take you some time to get started stage.”