Final 12 months, fintech API infrastructure gamers got here into the African tech scene, ushering in Plaid-like companies to companies and builders.
And the eye on these firms, significantly from enterprise capitalists, spiralled into this 12 months, with every important participant elevating massive seed to Collection A rounds.
OnePipe, a fintech API firm with a distinct play from the lot, joins the record right now, elevating $3.5 million seed to double down on its embedded finance providing.
African impact-focused VC Atlantica Ventures, a co-lead investor in OnePipe’s $950,000 pre-seed spherical final 12 months, additionally co-led this seed spherical alongside Tribe Capital and V&R Associates.
New traders Canaan Companions, Saison Capital, Norrsken (the fund of Klarna founder Niklas Adalberth), The Fund and Two Tradition Cap additionally participated. Present traders Chris Adelsbach, Techstars, Ingressive Capital, Acquity, P1, Raba and DFS Lab adopted on with new checks, alongside a couple of angel traders.
There are typically three fundamental fintech API infrastructure performs. One is knowledge and monetary accounts aggregation (Plaid, Okra, Mono, Sew and Pngme are some gamers within the area).
The second focuses on embedded finance and banking as a service, the place Treasury Prime, Marqeta ply their commerce. The third is core open banking pioneered by the likes of TrueLayer.
OnePipe’s unique recreation plan was to create an API gateway that related banks and fintechs below a uniform normal, a transfer that might permit the corporate to carry out core open banking.
However founder and CEO Ope Adeoye (self-described as the corporate’s chief plumber), on a name with FiratNews, mentioned upon steady integration with these monetary establishments, it turned clear the corporate wanted to pivot because it wasn’t producing many demand cycles.
And having struck partnerships with a couple of banks, OnePipe determined to take a step again and delve into the world of embedded finance.
In contrast to open banking and knowledge aggregation performs the place an organization must collaborate with nearly each financial institution within the nation the place they function, it’s not essentially the case with firms providing embedded finance. That’s why OnePipe has six accomplice banks for the time being.
“The caveat goes like this, the second you make a positioning play for banking as a service, all you actually need is one accomplice financial institution that permits you to go deep as a result of the embedded finance [offering] is about depth and never breadth,” mentioned the CEO.
“If you happen to go for knowledge aggregation or open banking generally, then you’re going for breadth, not depth. So on our facet, we mentioned we’d reasonably go together with tier two and tier three bands, the place when you describe the idea to them, they get it. It powers their development and is extra helpful to them, in contrast to different bigger monetary establishments.”
By operating API infrastructure on behalf of those accomplice banks and serving to them monetize it, OnePipe works with non-financial establishments to launch and cross-sell an array of monetary companies akin to credit score, accounts and funds inside their choices.
“We raised a spherical final 12 months to deal with one use case of the partnership, which was to tug collectively the APIs of a set set of banks and provide embedded banking or banking as a service play,” Adeoye asserted. “Which means, we make it doable for non-financial establishments, or companies generally, to supply banking companies to their clients.”
So an FMCG startup, as an example, can plug right into a financial institution’s API managed by OnePipe and start to subject accounts to clients, permitting them to make funds off these accounts and entry credit score once they want it.
Within the 10 months OnePipe switched as much as this mannequin, it has processed greater than 6.3 million transactions value over $46.3 million, the corporate mentioned. These numbers are from over 1 million particular person accounts and 138+ companies, starting from FMCG and retail to lending and agriculture.
OnePipe takes a proportion lower from transactions made on these accounts and shares with its accomplice banks. For loans provided through its APIs, OnePipe takes a minimum of 1% of the mortgage curiosity from its lending companions and likewise shares it with the companies and accomplice banks.
With what OnePipe has completed thus far, Aniko Szigetvari, the founding accomplice at Atlantica Ventures, believes the corporate will not be solely deepening monetary inclusion in Nigeria however the continent.
“In our view, embedded finance is the following enabler for each conventional and monetary service companies to extend buyer loyalty and income by providing a variety of third-party monetary merchandise and income streams for his or her clients,” she mentioned.
Although OnePipe is at the moment solely current in Nigeria, it’s making its first transfer past the nation’s shores to align with Szigetvari’s assertion.
OnePipe goes by way of a strategic partnership route as Adeoye talked about that his firm made a cope with African logistics and freight firm Sendy to develop into different African international locations. Per the corporate’s assertion, the plan is to “pull a Stripe-Shopify-esque tag staff.”
“We made certain that earlier than we appeared into different African international locations, we had been entering into with a buyer on the bottom already,” mentioned the CEO. “We did a cope with Sendy that made them take part on this spherical, and we’ll then deploy the capital for growth. In order they go to Egypt, South Africa, we’ll be deploying with them and develop collectively.”