African and emerging markets-concerned currency trading and payment startup VertoFX has raised USD 2.1 Mn in a seed round led by Accelerated Digital Ventures.
The company which is based in London with Lagos subsidiaries allows businesses and banks to exchange and make payments in foreign currencies without issues.
The funding round in which Y Combinator and some African angel investors participated, will be used by the firm to develop its platform and scale in Africa while expanding the currencies and gaining licenses. VertoFX told Techcrunch that it would also use the funds to hire talent in the compliance and regulator type roles.
Two Nigerian-born British ex-bankers – Anthony Oduwole and Ola Oyetayo – founded VertoFX in 2017, intending to solve the significant problems facing cross-border payments.
The initiative was part of the most recent cohort of Y Combinator, and the company says it has witnessed 20 percent month-on-month growth in transactions values since inception.
The founders chance upon this business idea while playing a poker game back in 2017. While comparing notes with businesses in Africa struggling to access foreign exchange to make cross-border payments.
The company which already has FCA approval and has processed of dollars in monthly transaction volumes for an untold number of businesses.
The startup utilizes technology to create a marketplace model and price discovery to create liquidity for transacted currencies. With 19 of such currencies on its platform, VertoFX operates in no less than 120 countries.
It also provides a one-stop service that lets business gain quick access to foreign currencies and make international payments in the easiest way possible.
“Our research says there’s about $400 billion being done by small and medium-scale businesses in Africa alone in transactional volume on an annual basis. If we take 1 percent of that as a commission or transaction fee, that’s a USD 4 billion addressable market, just in the continent,” said Oyetayo.
VertoFX CEO Ola Oyetayo commented: “We are in the early stages of helping businesses in emerging markets solve a significant problem they currently face and the funds we have raised will help put some fuel in our bus for the journey.
We spoke to a number of investors after YC’s demo day, but ADV’s patient capital ethos resonates strongly with Anthony and I. We are glad to have them and everyone else that participated in the round on board and are especially thankful to YCombinator for teaching us to build something people want.”
Tong Gu, Investment Lead at ADV, commented: “The VertoFX team has already shown an incredible amount of tenacity in relocating for the YCombinator program.
This will stand them in good stead as they embark on a huge mission and deliver their solution to the world’s emerging markets. With the product, regulatory license, and team already in place, the team has made great progress, and we’re so excited to be part of this journey with them.”
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