Banking-as-a-Service Fintech, Anchor Secures $2.4m Seed for pan-African Expansion
Leading pan-African Banking-as-a-Service (BaaS) provider Anchor has revealed its $2.4 million Seed round, which will be used to introduce new products, improve its infrastructure for licensing and compliance, and assess potential new markets.
Goat Capital led the round, which also included FoundersX, Rebel Fund, and other renowned investors. One of them is Y Combinator. The pre-seed round’s leader, Byld Ventures, took part in the seed round.
“We are thrilled to have gathered such strong support from investors who share our vision of expanding access to financial choices through BaaS and embedded finance. This has been a significant journey for the Anchor team after our pre-seed raise last year. We have grown tremendously and increased our impact across various clients and customer segments in Africa,”
says Segun Adeyemi, CEO and co-founder of Anchor.
The startup wants to make it easier for more people to enter the market for digital financial services without having to worry about exorbitant infrastructure development costs. The money raised will be used to launch new goods, research expanding markets, and invest in infrastructure for licensing and compliance.
The BaaS platform, which goes live in August 2022, makes it easier and faster to develop financial products, cutting the development time from years to days. Anchor’s APIs give its users the ability to create bank accounts, issue cards, make and receive payments conveniently, and provide savings and investment products through partnerships with regulated banking institutions.
Anchor to build on recent success
African firms may design, embed, and launch financial products using the infrastructure and resources provided by Anchor, a top embedded platform and banking-as-a-service provider.
The business emerged from stealth a year ago with a $1 million pre-seed and several early clients.
With revenue increasing 30% month over month (MoM) and clients like SeamlessHR, Bujeti, Zit, Penne, and LifeBank, Anchor has now reached over $550 million in annualized total transaction volume (TTV). The business has entered a deal with MTN MoMo PSB, Nigeria’s largest telecom provider in Africa, whose fintech division, which is expected to eclipse its prior growth figures.
With a CAGR of 30%, the embedded finance industry is anticipated to grow globally to $384.8 billion by 2029. 10% of this market will be accounted for by Africa. By 2029, the continent is anticipated to reach $40 billion, with a comparable CAGR of 33.2%. The home market of Anchor, Nigeria, has a TAM of at least $7 billion, indicating enormous growth potential for the seed-stage business.
“It’s no secret that businesses of all stripes are incorporating financial products into their services; during the past few years, we have seen this play out in Africa. At Anchor, we go above and beyond simply providing our clients with access to these financial APIs. In order to effectively serve their consumers, they must also be given information about consumer behavior, tastes, and financial trends, according to CEO Adeyemi.
“This funding allows us to build out complementary parts of our core BaaS platform, strengthen our compliance infrastructure and offer other value-added services.”
Justin Kan, Partner at Goat Capital, comments on their investment in Anchor: “The embedded finance sector in Africa is fledgling but developing quickly at over 30% CAGR. We keep an eye out for category leaders in our portfolio firms, and Anchor is growing at an exceptional rate and showing signs of becoming one. We are excited to partner with Segun and the team to leverage BaaS solutions to create financial prosperity for the continent”.
