Africa’s Consumer Remittance Startups Are Suddenly Going B2B (MB#1)
Every year, Africa’s diaspora sends home more than $100 billion, that’s bigger than all VC funding the continent has received in the last decade combined.
And yet, every few months, a new remittance startup pops up, trying to crack a market that’s already crowded with giants like WorldRemit, Transerwise and Remitly.
You’d think the market was done. It’s not.
In this week’s edition, we explore why remittance still attracts so many African founders and the new pattern that’s emerging beneath the surface.
The $100B Market No One’s Done With
2021 when Tanzania based Fintech Nala pivoted into remittance, investors told them: “Impossible, Worldremit is a $5 Billion dollar company and just acquired Sendwave for $500 Million, there is no way you are going to compete in this market, .”
Today, they have processed $1B+ and serve over 500K users.
Turns out the market can accommodate new players, just not in the same way.
The Unicorns also want piece
Two of Africa’s biggest fintech unicorns, Flutterwave ($3B valuation) and Moniepoint, have both launched dedicated remittance platforms — Send and MonieWorld.
Neither company started in remittance.
“Our biggest competitor in remittance is peer-to-peer transactions (people sending money back home through friends and family),” Eniolorunda, Co-founder and CEO at Moniepoint said. “Our approach isn’t necessarily to go head-to-head with Lemfi or Grey, it’s to go after the huge, untapped market—people still sending money manually.”
The Pattern Everyone’s Missing
Something interesting happened recently, maybe most people didn’t notice, we did.
When Nala (latest round: $40M) and Kredete (latest round: $22M) announced their new funding rounds, most expected them to only double down on their consumer remittance products.
Instead, both came out with something new; B2B infrastructure products — APIs allowing other fintechs and businesses to make secure, real-time cross-border payments into Africa.
Is B2B payout api a new thing?
B2B payouts apis have been for years in Africa, companies like OnaFriq have been offering that but when two consumer based Remmitance fintechs raised 20s millions of dollars and launch the B2B products that does the same thing it isnt a confidece, we took notice.
Is it because exisiting payouts apis are not reliable as Nala CEO’s explained?
Is it because the existing apis don’t reduce cost as Kredete CEO explained?
Should we expect more new B2B payout APIs from Africa’s consumer Remmitance Fintechs?
Let us know in the comments — and stay tuned for next week’s post on the emerging patterns we are seeing in Africa’s tech ecosystem.
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