YC-backed CrowdForce secures $3.6 million to strengthen agency banking in Nigeria

CrowdForce has raised $3.6m pre-series-A to increase access to cash for rural communities in Nigeria.

YC-backed CrowdForce secures $3.6 million to strengthen agency banking in Nigeria

CrowdForce has raised $3.6m pre series-A to increase access to cash for rural communities in Nigeria.

Split between equity and debt, the funding round was led by Aruwa Capital Management with participation from HAVAÍC and AAIC.

CrowdForce will use the capital to expand its team, geographical operations and marketing to increase its agent network. CrowdForce aims to grow its 7,000 active agents three-fold this year. The startup will distribute more point of sale (PoS) terminals to small businesses - gas stations, pharmacies, and aggregators/resellers - which act as mobile bank branches.

"Fintechs and challenger banks are emerging in Africa to deliver better financial services via digital rails. It’s a fantastic development in the market, but cash is clearly still king in Nigeria. 97% of retail transactions happen offline", Oluwatomi Ayorinde, CrowdForce CEO and co-founder stated.

Adding that, "there is a clear need to build an offline distribution network to enable fintechs and challengers to reach the mass market - this is exactly what we’re doing at CrowdForce. and this round will accelerate our momentum even more"

CrowdForce has been cash positive since 2020 and served 1.9m unique customers in 25 Nigerian states  to date. The startup's user growth has increased 25% month-on-month.

Founded by Oluwatomi Ayorinde and Damilola Ayorinde in 2015 as MobileForms, a data analytics platform designed to provide insights on hard-to-reach rural and semi-urban areas for businesses, NGOs and development organizations.

However, the startup modified its offerings in 2019, becoming a technology-driven agent distribution network that enables data collection for businesses and delivery of financial services to the mass market.

Prior to the pivot, the YC-backed startup worked with the Nigerian government on one of its project, TraderMoni, a small loan scheme for micro traders. The scheme's objective was to provide micro traders with repayable loans to enable their businesses. Unfortunately the database to execute the project was unavailable.

CrowdForce (then MobileForms) leveraged its 20,000-strong agents and was able to get 4.5 million eligible traders and registered them for the TraderMoni program.

Over the last three years, CrowdForce has partnered with cash-heavy small businesses, converting them to mobile bank branches while safely storing their cash on a PayForce digital wallet.

The startup has partnered with 19,000 fuel stations, 20,0000 resellers, and 6,000 pharmacies to broaden its distribution network. CrowdForce aims to bring financial services within one kilometer, or within 15 minutes, of all Nigerians.

Access to financial services in Nigeria remains a challenge. There are 4.8 bank branches and 19 ATMs per 100,000 adults, compared to the world average of 13 bank branches and 40 ATMs. Less than 1/3 of Nigerian adults have access to a bank branch or ATM within one kilometer of where they live.

Unreliable infrastructure also undermines trust in the banking system - roughly 15% of card transactions fail on a POS. According  to EFINA, 63.2m of 99.6m adults in Nigeria are financially included.

According to  Adesuwa Okunbo Rhodes, Aruwa Capita's Founder and Managing Partner, "We see significant value in the product as it is solving a real problem by providing access to critical financial services in rural areas that have been overlooked by traditional financial institutions".

"CrowdForce is actively deepening financial inclusion through its products and services, and has unique competitive advantages through its proprietary technology and extensive agent distribution network across the country", Adesuwa stated.