Fintech startup Wapi Pay has raised $2.2m in a pre-seed round to scale cross-border payments between Africa and Asia.
According to the World Bank, it is more expensive to send money to sub-Saharan Africa than to any region in the world. It is also the most expensive region to send money from. In Q1 2020, people spent an average of 8.9 percent to send money to the region, much higher than the global average of 6.8 percent. While much talk has been ongoing around sending money from Africa to the West, little has really been said about cross-border payments to places like Asia.
Founded in 2019 by Kenyan brothers Paul Ndichu and Eddie Ndichu, Wapi Pay provides a payments gateway for African businesses to receive and send money from Asia via mobile money platforms and bank accounts. The Kenyan Singapore-based startup has carved a market for itself by facilitating payments between the two distant continents of Africa and Asia.
“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,” said Paul Ndichu, CEO of Wapi Pay.
Trade relations between Africa and Asia, especially China and India, have increased rapidly over the years, and Paul Ndichu, realizing the growing need to make trade relationship between Africa and Asia more efficient, faster, and cheaper, said that Wapi Pay was born out of the desire to make cross-border transactions between the two continents as simple and easy as mobile money.
Companies from across the two continents participated in the fundraising round, which set the record as one of the largest of its kind in East Africa. The venture firms that took part include Pan-African and Africa-focused firms EchoVC, Kepple Africa, and Future Hub; Pan-Asian firms Transsion Holdings and Gobi Ventures, and China-based MSA Capital, known to have invested in unicorns Meituan, Nubank, and Klarna.
“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,” said Tim Chen, Vice President at MSA Capital.
Wapi Pay indicated that it was providing a solution to high remittance fees as it claimed that it processed cross-border transactions within a day and charged as low as 3 percent.
CEO of Wapi Pay, Eddie Ndichu said that the funds will help Wapi Pay diversify its product range and drive growth so that the startup can evolve remittances into real-time global cross-border payments, starting with Africa and Asia. Part of the non-equity pre-seed fund will be used to engage regulators for licensing and expansion across Africa and the rest will be used to scale up global payments and remittances between Africa and Asia.
Wapi Pay is currently based in Singapore, one of Asia’s economic power hubs, and has head offices in Kenya and China. It also works with local banks and platforms in China, Indonesia, India, Japan, Malaysia, Philippines, Singapore, Taiwan, Thailand, and Vietnam. The startup claims to be growing at 396 percent year-on-year since 2019 and hopes to continue on this trend. By the end of next year, Wapi Pay wants to process $500 million in remittances and increase the number of African merchants and Asian suppliers to half a million and 100,000, respectively.