Anchor, a leading pan-African Banking-as-a-Service (BaaS) provider, has announced its Seed round of $2.4 million to launch new products, invest in its licencing and compliance infrastructure, and evaluate expansion markets.
The round was led by Goat Capital, with participation from FoundersX, Rebel Fund and other world-class investors. They include Y Combinator. Byld Ventures, who led the pre-seed participated 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 company aims to empower more participants to enter the digital financial services space without costly infrastructure development or regulatory concerns. The funds raised will be allocated towards investing in licensing and compliance infrastructure, launching new products, and exploring expansion markets.
Launched in August 2022, the BaaS platform simplifies the process of building banking products, shortening it from years to days. In partnership with regulated banking institutions, Anchor’s APIs enable its customers to generate bank accounts, issue cards, make and receive payments seamlessly, and offer savings and investment products.
Anchor to build on recent success
Anchor is a leading banking-as-a-service and embedded platform for African businesses, providing them with the infrastructure and tools needed to build, embed, and launch financial products.
A year ago, the company came out of stealth with a $1 million pre-seed as well as some early customers.
Anchor has now hit over $550 million in annualised total transaction volume (TTV), with revenue growing 30% month-on-month (MoM) and a clientele that includes SeamlessHR, Bujeti, Zit, Penne, and LifeBank. Recently, the company signed a partnership with the fintech arm of Africa’s largest telecom in Nigeria, MTN MoMo PSB, that is set to dwarf its previous growth numbers.
Globally, the embedded finance market is expected to reach $384.8 billion by 2029, with a CAGR of 30%. Africa will account for 10% of this market. The continent is projected to reach $40 billion by 2029, with a similar CAGR of 33.2%. Nigeria, Anchor’s home market, has a TAM of at least $7 billion, signalling massive growth potential for the seed-stage company.
“It’s no news that companies of all kinds are embedding financial products into their offerings, and we have seen this play out over the last few years in Africa. At Anchor, we are going beyond just offering these banking APIs to our customers. But also empowering them with insights into customer behaviours, preferences, and financial trends that will enable them to serve their customers better,” says 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.”
Speaking on their investment in Anchor, Justin Kan, Partner at Goat Capital, says, “The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and shows signs of becoming the category leader, which is something we look out for in our portfolio companies. We are excited to partner with Segun and the team to leverage BaaS solutions to create financial prosperity for the continent”.
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