OnePipe has raised $950,000 in a pre-seed round from a roster of institutional and angel investors.
OnePipe is a Nigerian fintech company that aggregates financial services, in the form of APIs, from banks and fintechs into a standardised gateway for others (service providers) to use.
The investors that participated in the round include Atlantica Ventures, DFS Lab, Future Perfect Ventures, Ingressive Capital, P1 Ventures, Raba Capital, Sherpa Africa, Techstars, and Zedcrest Capital.
OnePipe was one of the 10 startups that joined Techstars New York Accelerator summer programme in July 2020. The pre-seed round was centered around Techstars' investment in OnePipe, and as such Techstars led the funding round.
Angel investors also participated in the $950,000 (₦361.4 million*) pre-seed round. The Angel investors include Idris Ayodeji Bello (Founding Partner at LoftyInc Capital Management), Jim Chu (investor in Sherpa), Haresh Aswani (Managing Director -Africa at Tolaram Group), Vishal Agarwal (Chairman of Full Circle), Folabi Esan (Partner at Adlevo Capital) and Chris Adelsbach (Early investor in Kuda Bank).
Following the pre-seed investment, Aniko Szigetvari and IK Kanu (founding partners at Atlantica Ventures), Charles Ifedi (CEO of eBanqo), Jenny Fielding (Managing Director of Techstars NYC), and Raj Kulasingam (Senior Counsel at Dentons) are joining OnePipe's advisory council.
Ope Adeoye, who founded OnePipe in 2019 alongside six people, says, "With this shot in the arm, we are now prepped to chase down some of the opportunities that we feel would have been further along in our journey. The vote of confidence inspires us and now we want to double down".
There has been a boom in fintech infrastructure companies in Nigeria. That is, companies providing APIs that enable any company to offer financial products and services to their customers. These companies are providing the infrastructure needed to make every company become a fintech company and are transforming banking and financial services.
Examples of these companies include payment facilitators such as Paystack, Flutterwave, and those offering fintech- and banking-as-a-service such as Rubies, OnePipe, Okra, Mono. Both Okra and Mono have raised $1 million and $500,000 pre-seed funding this year. It is worthy to note that Idris Bello also participated in the pre-seed round of Mono. Elsewhere, Visa Inc. had also announced its plan to acquire financial services API startup, Plaid for $5.3 billion in January 2020.
However, OnePipe is different from other API fintech startups in that it's a "'super aggregator' of every financial service API under a common standard. Like open banking in the absence of open banking". It is comparable to America's Synapse Fintech and England's Railsbank.
"All of us in the OnePipe team are firm believers in the open banking movement and what it can do for financial services adoption in the world", Ope, who is also a trustee of Open Banking Nigeria, said.
"While we are actively participating with the Open Banking Nigeria group to bring awareness and drive policy around open banking, we have created a gateway that pools APIs from multiple sources together under a unified specification that can very easily be refined to fit the final standards once the policies become a thing".
He added that demonstrating to banks and other financial institutions the commercial viability of opening up APIs to businesses will help to further accelerate interest and a willingness to participate in open banking.
Over the past two years, OnePipe says it has partnered with banks and businesses including Polaris Bank, SunTrust Bank, Fidelity Bank, Providus Bank, Migo, Flutterwave, Paystack and Quickteller. In addition, seven banks are coming onboard soon, according to OnePipe.
Ope identified three use cases of OnePipe: embed financial services, process payment from bank accounts, and provide banking services to underbanked Nigerians.
"We have now signed up several businesses including some of the bigger manufacturers, retail networks, agent networks and cooperative networks who are ready to go on this journey with the banks who have opened up to them through OnePipe", Ope said.
Open Banking Nigeria is an initiative of the Open Technology Foundation (OTF), a non-profit coalition of banks, fintechs and international organisations in the financial industry founded in 2018. The OTF aims to define an open and non-partisan set of APIs that would be adopted as a standard for the Nigerian financial industry.
Open Banking Nigeria currently has 39 partners including commercial banks, digital banks, fintechs and consulting firms. Five trustees are also listed on its website, namely, Adedeji Olowe, Ayowole Popoola, Khadijah Abu, Ope Adeoye, and Yvonne-Faith Elaigwu.
Adedeji revealed in an interview that the API standard draft is already done. But "beyond an API standard, the other critical part of an API [open] world is the regulation. And we are working closely with the Central Bank of Nigeria (CBN) to bring that to life. The CBN has penciled open banking as part of their critical objectives for Payment System Vision 2030", Adedeji said.
OnePipe firmly believes that banks and telecommunications companies don't have to feel threatened by fintechs and neither should fintechs. Because while banks and telcos need the products and services fintechs provide, fintechs need the distribution network of banks and telcos.
"Collaboration is how we can expand this financial services market even further", Ope concluded. "Collaboration is how we all win".
* $1 = ₦380
14:42 PM (WAT) Article updated to include an angel investor that was earlier omitted.