San Francisco and Lagos-headquartered fintech startup Yep! has raised $1.5 million in a pre-seed financing round. The funding round was led by pan-African venture capital firm Greenhouse Capital.
Yep! which is affiliated with the popular agency banking platform PayCentre Africa was founded by Olaoluwa Awojoodu. PayCentre is present in Nigeria, Togo, Ivory Coast and Burkina Faso. As of last year, PayCentre had more than 5 million customers and transacted more than $2 billion from a network of more than 100,000 merchants.
Yep! is a neobank looking to provide digital financial services to everyday people, small businesses and merchants. Yep wants to leverage what PayCentre has built to provide digital financial services. To bring the idea of Yep! to life, Olaoluwa Awojoodu teamed up with Airende Ojeomogha and Garry Ottosen, and is now looking at banking unbanked and underbanked people.
The plan is to go live across five markets where e-settlement is already present. According to CEO Olaoluwa Awojoodu, “We want to bank the guys in Lagos as well as bank the guys in a village at Ikot Ekpene. And at the same time, not just Nigeria, we are also looking at a full African play. So it’s just really that financial access for Africans, not just the guys that are digitally enabled, but even the guys that are off the digital channels, we are going to bring everybody into the digital environment using both digital tools and agent networks.”
Although agency banking platforms (such as PayCentre Africa) help to deal with the shortcomings of the traditional banking system as well as help narrow the financial inclusion gap, they may not provide their users or target audience with an all-around financial experience. This is what Yep! wants to do – provide access to a complete package of financial services to underbanked and unbanked people.
To show how serious and ready it is for business, Yep! has already acquired its microfinance license which is an important requirement for it to be able to operate. “We can now start banking consumers because we now hold their money, and we can also bank our agents. So we kind of closed all the ecosystem, bringing agents and merchants, businesses and consumers all in one ecosystem,” Airende Ojeomogha said signalling that the fintech is ready for business.
Yep! will provide services including account opening, issuance of debit cards, bill payments, credit financing to individuals and financial management services to businesses and individuals, and will operate just like other neobanks already in the country such as Kuda and FairMoney.
According to its founders, Yep! stands out from other rivals as “We’ve offered agent lending in the past and got low single digits default. We’ve taken a different approach to some of these things more strategically. Gary and I have raised hundreds of millions of debt, so access to credit facilities is an advantage for us, including the fact that we can raise those facilities pretty quickly,” co-founder Airende Ojeomogha said.
Co-founder and member of the company’s board Garry Ottosen added that “Another competitive advantage we have is we have a tonne of data. And I think one reason I was excited to come over is that I’ve spent years building credit sorts of models and helped build a couple of banks. We have a roadmap to start lending to our agents and because it’s a digital bank, we’ll be able to reach deep into both Nigeria and Francophone Africa.”
The company has a $500,000 credit facility currently and plans to start extending working capital loans to its existing merchants. The plan is to increase it to $10 million by the close of 2022, and the founders say that they are already in talks with international credit providers.
The funding acquired from the pre-seed round will be used to grow its agent network to a target of 200,000 by this year’s end. The startup also plans on remittance services and is testing products already. It also wants to offer checking and savings accounts, credit cards and a physical bank for African migrants.