A Nigerian fintech startup, Cleva, focused on providing a seamless banking platform for African individuals and businesses to receive international payments through USD accounts, has successfully raised $1.5 million in pre-seed funding.
The milestone marks a crucial step in addressing Africans’ persistent challenges in navigating international transactions.
1984 Ventures, an early-stage venture capital firm based in San Francisco, spearheaded the pre-seed funding round.
Alongside 1984 Ventures, notable participants included The Raba Partnership, Byld Ventures, FirstCheck Africa, and several prominent angel investors who demonstrated their confidence in Cleva’s vision and potential.
Aaron Michael, a partner at 1984 Ventures, expressed unwavering support for Cleva’s founders, Tolu Alabi and Philip Abel.
He underscored their adeptness in building banking products at Stripe and robust platforms at AWS, emphasizing their unique capacity to address the challenges posed by hyperinflation in the African market.
Y Combinator, renowned for nurturing innovative startups, also contributed to Cleva’s pre-seed round as the fintech participates in the accelerator’s winter 2024 batch this month.
This collaboration signifies a significant endorsement of Cleva’s mission to redefine African financial accessibility.
CEO Tolu Alabi recently shed light on the rationale behind launching the platform in August despite a competitive landscape.
Alabi emphasized the persistent challenges Africans encounter in receiving international payments, estimating the market for facilitating such transactions to be an $18 billion opportunity, primarily targeting remote workers and freelancers in Africa.
His words: “The problem that we’re trying to solve, which is enabling people to receive international payments, is not a Nigerian problem nor an African one. It’s a global problem; people in Latin America, Asia and even Canada need to receive dollars for their work and service.
”We’re starting with Nigeria because we know the market, and it’s also a big market. But we feel like because of our backgrounds, we’re very well positioned to solve this problem at a global scale.”
Cleva has experienced substantial growth since its inception, facilitating the opening of USD accounts for “thousands” of Nigerians within four months of its launch.
The fintech processed over $1 million in monthly payments, boasting a remarkable month-on-month revenue growth rate of 100%.
The startup’s differentiation strategy hinges on an exceptional customer experience and a transparent business model. Alabi stressed their commitment to going above and beyond for customers, offering prompt and reliable customer support.
Additionally, Cleva distinguishes itself from competitors by capping fees at $20, unlike the uncapped 1% fee prevalent in the industry.
Looking ahead, Cleva has ambitious plans to diversify its revenue streams, including introducing USD cards, U.S. asset savings, and expanding its services to cater to Africans in the diaspora.
The fintech also aims to offer professional invoice creation and global USD remittance, positioning itself amidst a competitive remittance market.
