Nigeria’s OnePipe raises $3.5M to double down on its embedded finance providing – •
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, notably 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 immediately, 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 usually three foremost fintech API infrastructure performs. One is information 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 authentic recreation plan was to create an API gateway that linked banks and fintechs underneath a uniform commonplace, a transfer that might enable 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 •, mentioned upon steady integration with these monetary establishments, it grew to become 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 information 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 in the meanwhile.
“The caveat goes like this, the second you make a positioning play for banking as a service, all you actually want is one accomplice financial institution that allows you to go deep as a result of the embedded finance [offering] is about depth and never breadth,” mentioned the CEO.
“Should you go for information aggregation or open banking generally, then you’re going for breadth, not depth. So on our facet, we mentioned we’d fairly go along 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 working 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 economic companies corresponding to credit score, accounts and funds inside their choices.
“We raised a spherical final 12 months to concentrate on one use case of the partnership, which was to tug collectively the APIs of a hard and fast set of banks and provide embedded banking or banking as a service play,” Adeoye asserted. “Which means, we make it potential for non-financial establishments, or companies generally, to supply banking companies to their prospects.”
So an FMCG startup, as an illustration, can plug right into a financial institution’s API managed by OnePipe and start to difficulty accounts to prospects, permitting them to make funds off these accounts and entry credit score after they want it.
Within the 10 months OnePipe switched as much as this mannequin, it has processed greater than 6.3 million transactions price 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 share reduce from transactions made on these accounts and shares with its accomplice banks. For loans provided by way of its APIs, OnePipe takes at the very least 1% of the mortgage curiosity from its lending companions and in addition shares it with the companies and accomplice banks.
With what OnePipe has completed to date, Aniko Szigetvari, the founding accomplice at Atlantica Ventures, believes the corporate shouldn’t be solely deepening monetary inclusion in Nigeria however the continent.
“In our view, embedded finance is the subsequent 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 prospects,” she mentioned.
Although OnePipe is presently solely current in Nigeria, it’s making its first transfer past the nation’s shores to align with Szigetvari’s assertion.
OnePipe goes by a strategic partnership route as Adeoye talked about that his firm made a take care of 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 workforce.”
“We made certain that earlier than we seemed into different African international locations, we have been getting in with a buyer on the bottom already,” mentioned the CEO. “We did a take care of Sendy that made them take part on this spherical, and we are going to then deploy the capital for enlargement. In order they go to Egypt, South Africa, we’ll be deploying with them and develop collectively.”