Zazuu has secured $2 million to deepen its cross-border payment offering and also build the world's first non-biased payment platform.
Founded in 2018 by four African-born entrepreneurs, Zazuu’s mission is to provide Africans in the diaspora with smart ways to move money. For African immigrants, life in the diaspora is fraught with inequalities, as systems are designed with biases against them. Otherwise routine activities like growing your credit rating or sending money home become herculean tasks, for immigrants who have to overcome institutional biases.
The four founders, Kay Akinwunmi (CEO), Korede Fanilola (COO), Tola Alade (CDO), and Tosin Ekolie (CTO) have diverse professional backgrounds ranging from technology, to design to banking and finance. However, as Africans living in the diaspora, dealing with institutional biases like unfair remittance practices has been a unifying experience. Their similar experiences and a passion for solving problems for Africans convinced them to come together and solve the challenge in 2018.
According to the World Bank, the global cost of moving money across borders averages around 6.09% of the value of the transaction. That figure can sometimes get as high as 22% for money sent to African countries.
While infrastructural challenges are often cited as a leading cause of the high costs of remittances, lack of transparency among remittance providers is actually the leading challenge. "In addition, a lack of transparency in the market has had the impact of reducing competition, as consumers tend to continue to patronize traditional market players because they are not aware of and cannot compare services, fees, and speed of their existing remittance service against other products." Remittance Prices Worldwide, a World Bank Initiative states.
"In 2018, I sent about $3000 back home to Nigeria. I thought I got the best deal on that transaction until about two weeks later when someone informed me I could have saved up to $30 in fees on that transaction if I had used a different provider. I was livid,” Fanilola said in a statement shared with Benjamindada.com. "We all have experiences like this where we only discovered in hindsight that we had lost more than we should on transactions back home simply by choosing the right provider."
According to Akinwunmi, "the mission has always been simple for us from day one. Africans have consistently gotten the shorter end of the stick with remittance transactions. We discovered that the primary reason for that was a lack of transparency on the part of the providers. We’re solving that problem by building a smarter way to transfer money. With Zazuu, users can search multiple money transfer providers in their region, compare the rates and fees, and then choose who to send money with, at no extra cost."
Over the two years of operation, Zazuu has evolved from a simple chatbot informing users of the daily rates in Facebook and Telegram groups, to an FCA-licensed organization in the UK with users in 8 countries across North America and Europe. Nearly a hundred thousand users have used the current iteration of its Search and Compare service to find the best rates for their corridors.
Zazuu’s recently completed raise represents a significant step in the startup’s mission to give Africans smart ways to move their money. The fundraising round saw participation from Launch Africa, Founders Factory Africa, Hoaq Club, Tinie Tempah, Jason Njoku, CEO IrokoTV, Babs Ogundeyi, CEO Kuda Bank, and other angel investors.
"The opportunity to innovate within the remittance space is massive; it’s opaque and fragmented, which means that it’s inefficient and ineffective for users. In teaming up with Zazuu, we saw an impressive team addressing a problem that’s worth solving, with a solution that has massive growth potential," Sam Sturm, Chief Venture Architect at Founders Factory Africa said.
The startup has recently launched a Pay with Zazuu feature that allows users to complete transactions in-app. This means that users can search, compare and complete their transfers with these providers (if they so please) without having to leave the app. Although this service is only currently available to senders in the UK and receivers in Nigeria and Ghana, Zazuu is working rapidly to expand access to more people.
Korede Fanilola, Zazzu's COO, added that "the plan for us is growth. We want to scale our solution as quickly as possible. We’re working on getting licenses that allow us to offer our service to users in other European countries before the end of the year. We’ll also be concurrently improving the product with new features that ensure that everyone sending money to Africa gets the best money transfer experience."
How does Zazuu work?
Zazuu’s model offers a fresh take on the challenge. Using a marketplace approach, the startup hopes to create a more equal system where users finally have more information before making a decision. Through this model, Zazuu believes that it can get remittance companies to compete directly for the attention of users, thus leading them to offer better rates and experiences.
While cross-border payments is the pressing problem, the startup also has its sights on other financial challenges faced by immigrants. Kay Akinwunmi said that Zazzu is more than a payments company. "We want a build a better financial ecosystem for Africans in the diaspora. That means, more than just helping people complete transactions, we want to better help them with better access to financial instruments like credit both home and abroad in the future. The aim is to build a completely non-biased financial well-being for African immigrants across the world," Akinwunmi said.