Africa: Anchor Secures $2.4 Million in Seed Funding to Expand Banking-as-a-Service Offerings Across Africa

Anchor, a prominent Banking-as-a-Service (BaaS) provider operating across Africa, has successfully raised $2.4 million in seed funding. The capital injection will be employed to launch new products, bolster the licensing and compliance framework, and explore expansion opportunities.

This seed round was spearheaded by Goat Capital, a leading investor in the financial technology space, and saw participation from respected organizations like FoundersX, Rebel Fund, Y Combinator, and Byld Ventures, which previously led Anchor’s pre-seed funding round.

Segun Adeyemi, the CEO and co-founder of Anchor, expressed enthusiasm for the support received from investors who share the company’s vision of enhancing financial access through BaaS and embedded finance. He emphasized the remarkable progress achieved by Anchor since its pre-seed funding round the previous year, noting substantial growth and increased impact across various client segments in Africa.

Empowering Financial Inclusion in Africa

Anchor’s core mission revolves around empowering more players to enter the digital financial services sector without the need for extensive infrastructure development or regulatory concerns. The raised funds will be strategically allocated to invest in licensing and compliance infrastructure, introduce new product offerings, and explore potential expansion markets.

Since its launch in August 2022, Anchor’s BaaS platform has significantly simplified the process of building banking products, reducing the timeline from years to mere days. Through strategic partnerships with regulated banking institutions, Anchor’s APIs enable clients to effortlessly create bank accounts, issue cards, facilitate seamless payments, and provide savings and investment products.

Building on Past Achievements

Anchor has witnessed substantial growth in recent times, achieving an annualized total transaction volume (TTV) surpassing $550 million. The company’s revenue is experiencing consistent 30% month-on-month (MoM) growth, and it boasts a diverse clientele that includes prominent names like SeamlessHR, Bujeti, Zit, Penne, and LifeBank. The recent partnership with MTN MoMo PSB, the fintech arm of Africa’s largest telecom in Nigeria, is poised to further accelerate its growth trajectory.

Globally, the embedded finance market is on a rapid growth trajectory, with expectations to reach $384.8 billion by 2029, boasting a CAGR of 30%. Africa is anticipated to contribute 10% to this market, with projections of reaching $40 billion by 2029 and a similar CAGR of 33.2%. Within this landscape, Nigeria, Anchor’s home market, represents a substantial Total Addressable Market (TAM) of at least $7 billion, indicating significant growth potential for the seed-stage company.

CEO Adeyemi emphasized that Anchor’s vision extends beyond offering banking APIs. The company seeks to empower clients with insights into customer behaviors, preferences, and financial trends, enabling them to better serve their customers. Adeyemi expressed that this funding allows Anchor to enhance various aspects of its core BaaS platform, reinforce its compliance infrastructure, and introduce additional value-added services.

Justin Kan, a Partner at Goat Capital, praised Anchor’s impressive growth rate, marking it as a potential category leader in the burgeoning embedded finance market in Africa. He expressed excitement about partnering with Anchor to leverage BaaS solutions in pursuit of creating financial prosperity across the continent.