Afriex, a Y Combinator-backed fintech startup, has raised $1.2 million in a seed round.
Tope Alabi and John Obirije founded the company in 2019 to provide instant, zero-fee transfers to Africans at home and abroad.
Users can deposit cash into the app, transfer money to a bank account or another user, and withdraw cash from a linked bank or debit card.
Sending money internationally is also time-consuming and costly.
Afriex solves this problem by purchasing cryptocurrency in one country and selling it in another, resulting in better exchange rates and quicker transactions than banks or other payment services.
The network, which is based in the United States and Nigeria, is currently processing millions of dollars in payments each month for thousands of Africans in the diaspora and on the continent, and is expected to grow 20-fold by 2020.
Following its participation in Y Combinator’s Summer 2020 Cohort, it was able to secure a US$1.2 million seed funding round, paving the way for even faster growth.
The round was led by Launch Africa and includes Y Combinator, Future Africa, Brightstone VC, Russell Smith, Mandela Dixon, Processus Capital, Uncommon Ventures, A$AP Capital, Furquan Rydhan, Precursor Ventures, Ivernet Holdings, and Andrea Vaccari, as well as the SoftBank Opportunity Fund, Future Africa, Brightstone VC, Russell Smith, Mandela Dixon, Processus Capital, Uncommon Ventures, A$AP Capital.
Afriex, like other crypto remittance platforms, is based on stablecoins, which are digital currencies backed by the US dollar.
To put it another way, the company buys cryptocurrency in one country and sells it in another in order to get better exchange rates.
This differs from more well-known outlets such as Western Union and Wise, which rely on conventional banking systems.
The startup plans to scale up with the new funding by expanding its team and entering new markets.
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