As the final quarter of 2020 winds down, it’s time again to take a look at the most impressive startups from the last three months.
Startup Watch is a quarterly column where the BD team brings readers a shortlist of Nigerian startups to keep an eye on. The startups are typically early-stage, unknown startups doing wonderful things in their little corner of the country.
Since critical information like revenue is typically available only to investors, the criteria for companies making this list is from publicly available information like raises, product release, brand positioning etc. Unlike last quarter's edition, which had four companies, five companies are featured in this edition:
Fintech API companies have been getting a lot of attention in 2020. The second and third quarters of the year saw at least one API company receive funding. In April 2020, Okra, a self-defined super-connector, raised $1 million in pre-seed capital from TLcom Capital. Mono, another API company, raised $500,000 pre-seed in a round led by Lateral Capital.
December saw yet another API-aggregator, OnePipe, raise $950,000 in a round led by Sherpa and Techstars. Prior to its raise, the company had been part of Techstars New York Accelerator summer programme.
Perhaps, more important than its raise is its ambition vision. The startup aims to revolutionise the fintech ecosystem by promoting Open Banking - an initiative that seeks to standardise APIs in the financial industry. The adoption of Open Banking has been touted to ease access to financial services for all users and fast track value creation for stakeholders.
Ope Adeoye, CEO of OnePipe, identified three use cases of OnePipe: embed financial services, process payment from bank accounts, and provide banking services to underbanked Nigerians.
While it is still early days for the company, its ambitious vision coupled with its deep pockets makes it one to watch for the future.
Read more about OnePipe’s raise here: OnePipe closes $950,000 pre-seed round from Sherpa, Techstars, others.
When a company raises money without a pitch deck, it can only be because it has a compelling story.
Nigeria’s rising reputation as the go-to place for affordable, skilled tech talents has many international organisations considering outsourcing some of their services to the region. TalentQL hopes to capture that market.
The company is looking to build solid remote teams and a talent pipeline that can service world-class companies. The startup will establish developer campuses that double as co-working spaces with internet and electricity where their teams can work from.
Interestingly, the company is exploring talents outside of Lagos, Nigeria’s commercial capital. The first campus will be located in Ile-Ife, Osun state, while others will subsequently launch in Enugu and Kaduna. All three cities are home to top tertiary institutions, which will most definitely serve as talent pipelines for the company.
Read more on TalentQL’s raise here: TalentQL raises $300,000 in a pre-seed round led by Zedcrest Capital.
Although Kuda is already one of Nigeria’s most popular digital challenger banks, it’s seed raise of $10 million means the list would be incomplete without it. The figure is currently the highest amount any African start startup has raised at the seed stage.
Launched in 2017, Kuda had previously raised $1.6 million during its pre-seed round in 2019. That investment had given it enough runway to become one of the top digital banks in Africa. According to Babs Ogundeyi, co-founder and CEO of Kuda, the company had already acquired about 300,000 customers at the time of the seed raise. The company also owns the full stack of its core banking services and processes over $500 million worth of transactions monthly.
Kuda’s recent fundraising will likely be used to expand its services across the continent. Babs Ogundeyi has hinted that the company will be looking to get full licenses that allow it to perform services like lending.
With $10 million in the bank, Kuda is looking likely to be the first digital challenger bank to go mainstream.
Read more: Kuda Bank raises $10M in seed funding.
When a startup treads uncharted territories, there are two kinds of responses to be expected - negativity or support. For Seamless HR, the response has been overwhelmingly supportive, especially when it comes to funding.
After raising $2 million in its seed round in April, the company raised an undisclosed amount from investors in October. Investors include Lateral capital and Consonance Investment Managers who led the seed round. The funding received is thought to be between $1 million and $9 million.
So, what makes Seamless HR an interesting prospect for investors?
Seamless HR is the first HR-as-a-service company in the region. Its software helps ease hiring, onboarding, and employee-management for companies. Payroll, performance workforce planning, time off, succession, learning, and development can all be scheduled using Seamless HR.
As a pioneering startup in its sector, Seamless HR is bound to enjoy a first-mover advantage, provided it can scale quickly enough. Whether or not it has the potential to become a unicorn is still a matter of debate.
Buycoins is the only company on the list that hasn’t raised funding in 2020. The YC-backed company, instead, has made waves by launching a series of successful products and expanding its operations.
In April 2020, the company launched Sendcash, a platform that allows users to send money to Nigerian bank accounts from anywhere in the world. Fast forward to October 2020, Buy coins extended Sendcash’s services to Ghana.
In November, the crypto company completed integrations with Wyre and Apple Pay, allowing users to send money on Sendcash directly from their bank cards.
As the festive period got into full swing in December, Buycoins also launched GetCards, a service that allows Nigerians to buy gift cards from their favorite stores using naira bank transfers.
With the recent announcements from Buycoins, it is evident that the company is doubling down on integrating crypto use into everyday activities, and betting against it may not be a good idea.
Startup Watch is a quarterly column where we highlight startups doing interesting things in their various fields. If you have interesting news on startups, send it to us at [email protected]