Nigerian Fintech Startup, Grey Secures $2M for Cross-border Payments Play, Regional Expansion

To make it easier for Nigerians and other Africans to make overseas payments, fintech companies frequently provide virtual foreign bank accounts.

In a recent development, Grey, a fintech in this category that gives African freelancers and remote employees virtual foreign bank accounts, said that it had acquired $2 million in seed capital.

Grey was established in July 2020 by Idorenyin Obong and Femi Aghedo as a rapid exchange service to assist Nigerians in converting foreign dollars in their domiciliary accounts into local currency, the naira. The firm received an unknown pre-seed investment last year, and in March it was accepted into YC’s winter batch.

The Nigerian fintech, which was sponsored by YC, has subsequently moved into East Africa, starting in Kenya. CEO Obong told TechCrunch that the move was accompanied by agreements with two Kenyan businesses: edtech startup Moringa and payments juggernaut Cellulant.

The chief executive stated, “We chose Cellulant to power our payment infrastructure for Kenyan shillings. “As we are aiming to construct something for freelancers, Moringa is like a gateway and channel for educating fresh tech talent, so it seemed natural to have such a cooperation.”

Therefore, users in Nigeria and Kenya can use USD, GBP, and EUR bank accounts opened on the platform to receive international payments from over 88 countries, convert them into their local currencies (naira and shilling), and withdraw them directly to their mobile money or local bank account.

On the platform, users can send money to the UK and Europe. The functionality of Grey has also been improved to accept payouts in Ugandan shillings, an additional East African currency, bringing the total supported currencies to six. Obong stated that Tanzania, another country in East Africa, is included in Grey’s regional scope even though the country has not yet seen its official launch. The fintech will grow into Tanzania within a month, he continued.

Grey claims to have 100,000 individual users, and its transaction volumes have grown by 200% since the start of the year. In order to supplement this consumer-facing growth and broaden the company’s product offerings beyond remittances and person-to-person payments, COO Aghedo stated that the company secretly developed a business-focused product, Grey Business.

One reason firms across the continent prefer the dollar to pay one another instead of local currencies is the lack of currency interoperability. This issue is being addressed by platforms like Verto, a worldwide B2B payments network that enables African firms to send and receive money internationally using multicurrency wallets. The one-year-old fintech company wants to break into the market with its Grey Business product by giving micro and small enterprises an affordable way to send and receive local currencies across the continent.

For the past two months, Grey Business has been in private beta; the seed financing will aid in its public launch in Nigeria and Kenya.

Venture capital firms including Y Combinator, Soma Capital, Heirloom Fund, and True Culture Fund are among the investors in the round, as well as angel investors like Alan Rutledge, Samvit Ramadurgam, and Karthik Ramakrishnan. Startups like PayDay, which is supported by Techstars, provide comparable services.

“The goal of Grey’s founding was to enable people to have mobile, location-independent lives. We’ve made it simple because, in my opinion, sending or receiving funds should be the least of your concerns as a freelancer, remote worker, or digital nomad, said CEO Obong. “We like to remark that our goal is to make sending emails as simple as sending money internationally. We hope to make a significant difference in how the continent of Africa interacts with foreign exchange.