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Fintech startup, Anchor, has raised $2.4 million in a seed round targeted at expanding its product offerings.

This came a year after the banking-as-a-service (BaaS) provider had raised $1 million plus in a pre-seed, thus bringing its total raise to over $3.4 million.

The latest investment round was led by Goat Capital and had participation from FoundersX, Rebel Fund, and some existing investors, including Y Combinator and Byld Ventures.

Anchor is one of a few BaaS providers in the Nigerian market and its competitors in the Nigerian fintech space include JUMO, Maplerad, OnePipe, and Bloc.

What they are saying

Commenting on the new fundraising, Anchor’s co-founder and CEO, Segun Adeyemi, said the company had learned some lessons in the industry in the last one year, which include determining proper pricing, developing revenue sources positively affecting customers’ bottom line, and re-engineering its compliance processes. With the latest funding, he said the company will double focus in those areas.

“We want to improve our end-to-end compliance system, invest in value-added products like our ledger system, and onboard more customers,” he said.
The Nigerian startup is also planning expansion to other African countries, which motivated Goat Capital’s investment. Partner at lead investor Goat Capital, Justin Kan, said:

“The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and showing signs of becoming the category leader, which is something we look out for in our portfolio companies.”

Transaction volume

The YC-backed fintech claims to have generated more than $550 million in annualized total transaction volume (TTV) by enabling fintech services for these enterprises.

Likewise, it is increasing revenue by 30% month-on-month, according to the chief executive. Processing fees, issuance fees for accounts and cards, and interest income on the float generate revenue for the firm.

Anchor partners with regulated banking institutions. By doing this, it claims to help businesses shorten the process of building banking products from years to days.

The fintech catered to only customer accounts when it first launched.

However, Adeyemi said Anchor’s APIs now support business accounts, card issuance, bill payments, bulk disbursements, cross-border payments, and developer-only features such as an audit log system and developer webhooks.

According to a recent report by Ernst & Young, the global embedded finance market is estimated to grow from US$264 billion in 2021 to US$606 billion in 2025 across the entire value chain.