In less than a year, a new Nigeria’s fintech startup, Okra, has racked up a rare mix of achievements.
The creator of the Lagos based API built a product that generates revenue from both payment start-ups and from existing financial institutions.
Okra has raised $1 million in pre-seed funding from TLcom Capital — a $71 million VC firm based on Africa that rarely invests in early-stage enterprises or fintech firms.
The company is now poised to reach and recruit new markets.
Created by Nigerians Fara Ashiru Jituboh and David Peterside in June 2019, Okra sees itself as a motherboard for the financial system of the continent of the 21st century.
“We are developing a superconnector API that … allows individuals to connect their bank accounts directly to applications from third parties. And that is their African bank accounts beginning in Africa’s biggest market, Nigeria, “Ashiru Jituboh said.
Fintech, as a market, has become the highest funded tech space on the continent, earning the bulk of an estimated $2 billion in VC that went to African startups in 2019. Those ventures, and a number of existing banks on the continent, are in a race to create market share through financial inclusion.
According to many reports — including The Global Findex Database — the continent is home to the largest proportion of the unbanked population in the world, with a substantial number of underbanked customers and SMEs.
With 54 countries, 1.2 billion people and thousands of fairly young startups, Africa’s fintech space is full of moving pieces. Okra is developing a network similar to U.S. business Plaid that links accounts and financial data to banking apps into a revenue-generating product.
Nigeria serves as a major financial center with Africa’s largest population of 200 million people — but there is still a gap between fintech apps and banks, according to Ashiru Jituboh of Okra.
“There’s no way to link your bank account directly via an API or directly to an application here in this market,” she said.
For certain types of integrations, Okra provides multiple paying bundles and opens the code to developers for its five product categories: authorisation, balance, purchases, identity and accounts.
Okra has already built a diverse customer list that includes Oil, Axa Mansard, online bank branch and Nigerian digital lender Renmoney, electronic payments company.
According to Ashiru Jituboh, the company generates revenue through transaction payments and earns every time a user links a bank account to a client.
On how the Okra varies from other well-financed fintech companies in Nigeria, such as Flutterwave or Interswitch, “The response is we don’t make payments, but what we do is make processes much easier with [payment providers],” she said.
Ashiru Jituboh comes into her role as CEO with a background in software engineering and a good US connection. Raised in Nigeria, she grew up in North Carolina and studied Computer Science.
She stopped in finance — JP Morgan Chase and Fidelity Investments — and then in tech companies before she made the leap to found. “I’ve been working in startups but I’ve only been number two or three employees,” Ashiru Jituboh said.
After returning to Nigeria, she decided to go all in on Okra, and noted the need to link up the emerging digital financial infrastructure of the country.
“It was when we noticed that all these fintech CEOs and CTOs were struggling with this use case that we knew it was a major adressable market,” she said.
According to VC Andreata Muforo, Okra caught the attention of TLcom Capital in the second quarter of 2019 soon after its launch.
This year the company closed its $71 million Tide Africa fund with offices in London, Lagos and Nairobi. TLcom concentrated primarily on Series A and subsequent investments, including funding for Kenyan agtech startup Twiga Foods and Nigerian trucking logistics firm Kobo360.
Maurizio Caio, managing partner of the fund, explained in an interview last year that TLcom was moving more towards investments in infrastructure-oriented tech companies and away from the more commoditized payments and lending startups in Africa.
The VC firm has been drawn to Okra for its potential to represent the broader financial sector of the continent. “It’s a service that other fintechs can plug in and use, and it’s driving fintech development across the continent … this has been a major hook for us,” Andreata Muforo of TLcom told TechCrunch on a call.
Founder Fara Ashiru Jituboh has also been a factor in the fund making a pre-seed investment of $1 million in Okra. “We found that she was very strong, and also liked the fact that she was a technical founder,” Muforo said. As part of the investment, she will join the board of Okra along with TLcom Capital partner Ido Sum.
Besides recruiting fresh engineering talent, the startup intends to take its product offerings that link bank accounts to apps in new African countries — though it would not disclose where or when.
“We are looking at three target markets our customers are already in,” Ashiru Jituboh said. Okra investor Andreata Muforo named Kenya — with one of the highest penetration levels of mobile money in the world — as a possible candidate for digital services for the company.