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OnePipe, A Nigerian Fintech API Startup, Raises $3.5m in Pre-Seed Round

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OnePipe, a Nigerian fintech API company, has secured $3.5 million in venture funding to expand embedded finance offering, joining a host of API infrastructure players in Africa executing multi-million dollars financial services.

The seed round was co-led by African impact-focused VC Atlantic Ventures, who also co-led OnePipe’s $950,000 pre-seed round. New investors include Canaan Partners, Saison Capital, Norrsken and the Fund and Two Culture Cap. Existing investors who participated are Chris Adelsbach, Techstars, Ingressive Capital, Acquity, P1, Raba and DFS Lab and other angel investors.

OnePipe had planned to include developing an API gateway that would connect banks and fintechs using a common standard, allowing the company to execute essential open banking functions.

But the plan changed after OnePipe had established agreements with a number of financial institutions. The financial startup made the decision to take a step back and explore the area of embedded finance.

Currently, there are six banks on board as OnePipe’s financial partners.

Using OnePipe’s API platform, non-financial companies can launch and cross-sell a variety of financial services such as credit, accounts, and payments within their offers.

The fintech company raised a round of funding last year to focus on one use case of the relationship, which was to gather together the APIs of a defined set of banks and deliver embedded banking or banking as a service to customers. Non-financial institutions, or businesses in general, are able to offer banking services to their consumers as a result of its services. Customers can pay off their accounts and access credit when they need it by using OnePipe’s bank API.

OnePipe has handled more than 6.3 million transactions worth a total of $46.3 million in the ten months after switching to this model, based on the company’s statistics. From FMCG and retail to lending and agriculture, these data represent over 1 million individual accounts.

In exchange for processing transactions on these accounts, OnePipe receives a percentage of the proceeds, which it distributes to its partner banks. OnePipe takes at least 1% of the loan interest from its lending partners and divides it with businesses and partner banks.

For its expansion into additional African countries, OnePipe has entered into a strategic relationship with African logistics and freight firm Sendy, according to Ope Adeoye, the company’s founder and CEO. The company officials said they plan to form a “Stripe-Shopify-like tag group.”

The CEO explained that the company went into other African countries with a customer on the ground first. “We did a deal with Sendy that made them participate in this round, and we will then deploy the capital for expansion.” As they deploy to Egypt and South Africa, Onepipe is sure it will involve and observe from them.

There are generally three main fintech API infrastructure plays. One is data and financial accounts aggregation, where Plaid, Okra, Mono, Stitch and Pngme play.

The second is embedded finance and banking as a service, where Treasury Prime, Marqeta have taken a space. And the third is core open banking pioneered by the likes of TrueLayer. OnePipe has chosen embedded finance for reasons that Adeoye explained.

“The caveat goes like this, the moment you make a positioning play for banking as a service, all you really need is one partner bank that lets you go deep because the embedded finance [offering] is about depth and not breadth,” said the CEO.

“If you go for data aggregation or open banking in general, then you are going for breadth, not depth. So on our side, we said we’d rather go with tier two and tier three bands, where once you describe the concept to them, they get it. It powers their growth and is more valuable to them, unlike other larger financial institutions.”

Running API infrastructure on behalf of partner banks and helping them monetize it helps OnePipe to work with non-financial institutions to launch and cross-sell an array of financial services such as credit, accounts and payments within their offerings.

You can sue your bank if its ATM fails to dispense cash to you!

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Let me tell you some amusing fact I’m sure you may likely not be aware of:

Do you know that you can sue a bank if their Automated Teller Machine (ATM) fails to dispense cash to you as long as you have money in that account?

Yes, you read right! 

Did that surprise you?

Well don’t take my word for it, it is the word and the decision of the court.

The Background story!

Mr. Moses G Jwan is an Ecobank Plc customer and owns an account with the bank in which an Automated Teller Machine (Atm) debit card was issued to him. He tried using the debit card to make a withdrawal in a United Bank of Africa’s ATM gallery. He was debited but cash wasn’t dispensed to him by the teller machine.

He decided to take legal action. He sued both EcoBank Plc his bank and United Bank of Africa (UBA) the bank that owns the teller machine that didn’t dispense cash to him.

The matter was dismissed in the high court for the technicality of plaintiff’s failure to discharge the burden of proof placed on him and he (Mr Moses Jwan) went on appeal and appealed to the court of appeal.

In the court of appeal, Plateau state judicial division, the court held that Automated Teller Machine (ATM)  is like a Cheque and failure of it  to dispense cash is a breach of Banker/customer duty in as much as the customer has a withdraw-able sum in the bank account.

This case is therefore a judicial precedent, laying down the precedent that if your bank’s teller machine fails to dispense cash to you while you’ve got a withdraw-able sum in the account, the bank is in breach of their duty to provide cash to you and damages will be awarded against them.

If you are interested in reading up the case, the case is reported in the Nigerian Weekly Law Report (NWLR) where it is reported: Moses Jwan V. Eco Bank Plc (2021) 10 NWLR (PT 1785 ) 449 (CA)

Experience a New Form of Education At Tekedia Institute

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I like this comment, left by a Tekedia Mini-MBA member who has registered for our Feb 2022 edition; we give access to many materials ahead, including my exclusive books. In Tekedia Mini-MBA, we teach the necessity of brands to pursue perception, not just needs and expectations of customers. In Harvard, I have also written on that construct, making the point that fandom comes when companies turn their customers into fans, and that only happens when we meet them at perception level, well beyond their needs. 

On “The Dangote System: Techniques for Building Conglomerates” book, our member left this one: 

“After reading and listening to the presentation, I had to go check again the meaning of perception. “The act or faculty of perceiving, or apprehending by means of the senses or of the mind; cognition; understanding. immediate or intuitive recognition or appreciation, as of moral, psychological, or aesthetic qualities; insight; intuition; discernment: an artist of rare perception”. My conclusion, perception in business, is the ability to think for and beyond the customer needs and expectations. Now, I need to work with great intuition. Thank you prof.”

 I invite you to experience a new type of education at Tekedia Institute.

 Comment on LinkedIn Post

Comment #1: You speak of literal perception whereas Prof is using the term metaphorically to refer to something that people want/need but hadn’t imagined until it was presented to them.

Comment #2: Perception Demand Leadership entails demonstrating through a feat of Innovative Genius that you understand the solutions to the needs of your customers more than they themselves do.

People don’t really know what they want, but they know they want it anyway and they want it now! Henry Ford said that if he had asked people to tell him what they wanted, they would have said “a faster horse,” but Ford has uncommon perspective on the solution and when it was engineered into existence as the famous “Model T” through a stroke of Innovative Genius, the people knew at once the equation to their mobility needs could not have been resolved any better. Also when Steve Jobs engineered the iPhone into existence through a feat of Innovative Genius, people knew at once their communication couldn’t get any smarter.

It’s relatively useless to ask your customers what they want because they simply don’t know. It’s your job as an Innovator to figure it out and demonstrate it through what the Professor has christianed Perception Demand Leadership.

Comment 3: Expectation comes before perception in the customer experience journey in business management.

Expectation is what customer visualizes to experience before using a service or product. A customer can expect to arrive a destination early enough to carry out some transactions. Perception is formed by user/customer during the actual experience. And this experience informs the customer possible conclusion on whether to repeat or not.

Therefore, if the customer’s expectation is greater than the perception formed at the end of the service, the service is said to be poorly rendered. On the other hand, If the perception is greater than the expectation, the service is said to be of quality.

It is wise for businesses to always examine and bridge operations gaps within the customer and company domains to get to the perception level of customer satisfaction to retain customers.

Thank you, Prof.

 

The Journey of 5G Innovation – Tekedia Mini-MBA

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Good People, remember that the Tekedia Innovation Week continues. Today, one of the zen-masters in the 5G world will be anchoring the session. A graduate of FUT, Owerri (the best EEE department in the world), Queen Mary (UK), Warwick MBA (UK) and soon PhD (King’s College, UK).

Formerly the Strategy Director & 5G Taskforce Lead in GSMA, the #1 industry association in the GSM community, he is currently the Global Marketing Manager – Telecoms: 5G, Accelerated Computing, Edge AI at global chip category-king NVIDIA.

Tekedia Faculty Emeka Obiodu will help you understand the business of 5G. Time is 7pm WAT; Zoom link in the Board school.tekedia.com

 

Sabi, Nigeria’s B2B Marketplace, Raises $6m for Expansion

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Sabi, Africa’s leading B2B marketplace has raised a $6 million bridge round to expand its services to the informal sector. The round was led by CRE Venture Capital among others.

The company has witnessed rapid growth since it began operations in Nigeria over a year ago, expanding to Kenya. Sabi serves Nigeria’s $244 billion informal trade sector by providing the digital infrastructure to help SMEs grow their businesses. Merchants use the platform to manage their businesses, carrying out B2B businesses.

In August, the company announced that it has 150,000 businesses in its customer-base, a figure that has increased to 175,000 now. Merchants’ transactions at Sabi stood at over a US$100 million GMV annualized rate.

The company has more than 10,000 agents who interact with merchants across all 36 Nigerian states, delivering the online and offline support needed to properly service the over 41 million micro, small, and medium-sized enterprises in Nigeria alone, where its service is largely operational.

Sabi’s bridge round follows the company’s seed round closed in mid-2020 which also attracted leading international investors including Janngo Capital, Atlantica Ventures, and Waarde Capital. This bridge round financing will help fuel the company’s rapid growth as it eyes new markets including South Africa, which is also home to a multi-billion dollar informal sector.

Anu Adasolum, CEO of Sabi said the round will help to accelerate the platform’s growth, building on its increasing transaction volume.

“We are excited to have closed this bridge round as Sabi continues to grow at an incredible pace. Our merchant users are taking advantage of every part of our platform, and the quality of the B2B partners we have brought onto the market is clear from the ever-increasing transaction volume.”

Pardon Makumbe, Co-founder & Managing Partner of CRE Venture Capital, commenting on the investment, said CRE Venture Capital is proud to support Sabi’s continued growth across Nigeria and expansion into Kenya and South Africa.

Sabi has developed an online/offline approach that is endearing to informal businesses, in addition to the quality of its platform and service provider curation, which has clearly taken root in Nigeria.

Ademola Adesina, co-founder of Sabi, while commenting on the round said it will help the company to expand beyond Nigeria to other African countries.

“Now that Sabi is operational all across Nigeria, we look forward to bringing our solution into new markets with similar informal sector challenges, starting with Kenya and then South Africa. Sabi’s team, platform, and investors are ready to continue scaling Sabi into Africa’s leading B2B marketplace.”

With the $6 million round, Sabi has proved itself as a leader in Africa’s B2B market, and it is on the verge of becoming one of the fastest-growing African companies of 2021.