LemFi Lands Big Funding Boost To Expand Neobank For African Diaspora

By  |  August 24, 2023

LemFi, a fintech startup providing financial services for immigrants, has raised USD 33 M in a Series A funding round led by Left Lane Capital. Notable contributors to this funding include Y Combinator, Zrosk, Global Founders Capital, and Olive Tree.

Immigrants moving abroad often encounter a formidable obstacle: limited access to financial services. Co-founders Ridwan Olalere and Rian Cochran recognized this challenge and united forces in 2020 to devise solutions through the inception of LemFi (formerly known as Lemonade Finance).

Their shared vision aimed to create a platform that empowers the next wave of immigrants to overcome these financial hurdles, starting with Nigerians relocating to the West. Amid worsening conditions back home, Nigerians are increasingly emigrating to tap opportunities elsewhere, with the UK, and Canada among the top destinations.

The paths of LemFi’s co-founders first converged during the development of OPay, a prominent name in African fintech currently. Drawing from their combined decades of experience navigating the intricate landscape of cross-border payments and the labyrinthine regulatory dynamics within emerging markets, Olalere and Cochran harnessed their collective insights to lay the foundation for LemFi.

The CEO of LemFi, Olalere, himself an immigrant, attested to the personal drive behind their mission, stating, “Having lived on three continents and leading a multicultural team, our mission is deeply personal: creating a world where financial services are universally accessible. We’ve already made life easier for over half a million people, but we’re only just getting started.”

Presently, LemFi, allows users to swiftly onboard within minutes of residency, providing access to a multi-currency ecosystem that facilitates sending, receiving, holding, converting, and saving in the currencies of both their home country and host country.

Moreover, LemFi, which got into the coveted Y Combinator accelerator in the summer of 2021, offers international transfers at competitive exchange rates, without any fees for transfers or account maintenance. Over the last decade, remittance flows to Africa doubled, reaching USD 100 B in 2022, according to the United Nations. The prospect of addressing decades-long problems, such as bloated fees and inadequate African corridors perennially associated with legacy money transfer services, has seen LemFi and other notable challengers like Chipper Cash, Eversend, etc., emerge and gain ground with a nuanced approach.

In a call with WT, Cochran refrained from divulging further insight into the company’s numbers citing the need to stay grounded but emphasised LemFi has seen impressive growth, attracting fresh funding from notable investors, some of which participated in its previous publicly announced funding round – a USD 725 K pre-seed in 2021.

Olalere elaborated on LemFi’s product offering, emphasizing its transformative potential: “Our product is a game changer for users since traditional banks and other leading neobanks have always steered clear of less common or more volatile currencies. This has driven immigrants to often use unsafe, informal channels or to stitch together several other services to solve some of their basic financial needs. Until now.”

In 2020, LemFi made its debut in Canada, facilitating easy and cost-effective remittance payments to Nigeria, Ghana, and Kenya. Building on its initial success, the company expanded its operations to the UK in 2021, concurrently broadening its scope by introducing 10 new African remittance corridors.

A strategic milestone was reached with LemFi’s acquisition of UK-based Rightcard Payment Services in late 2021. This acquisition conferred an Electronic Money Institution (EMI) license from the UK’s Financial Conduct Authority, enabling LemFi to augment its services with features such as higher transaction limits and e-money accounts.

Matthew Miller, Principal at Left Lane Capital, commended LemFi’s strategic approach to expansion and acquisition, highlighting the establishment of a robust network of financial institution partners for seamless cross-border payments. He expressed enthusiasm in joining LemFi’s Board of Directors as a testament to Left Lane Capital’s support for LemFi’s global growth ambitions.

The year 2023 has proven pivotal for LemFi, with its subsidiary Rightcard Payment Services securing an International Money Transfer Operator (IMTO) license from the Central Bank of Nigeria. This landmark achievement empowers LemFi to collaborate with Nigerian banks, eliminating intermediaries and enhancing user experience.

With a commitment to furnishing accessible financial services to migrant communities globally, LemFi’s latest capital infusion will fuel its expansion into regions such as the United States, Europe, the Middle East, and Asia.

Over the long haul, the company plans to continue to develop financial products tailored to the unique needs of the African diaspora, currently estimated at 30-40 million immigrants across North America and Europe, providing multi-currency accounts to help manage their unique banking needs.

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