Anchor, a fintech firm, has acquired $2.4 million in a seed round to increase the scope of its product line.
This comes a year after the banking-as-a-service (BaaS) provider had received over $3.4 million in total, including over $1 million in a pre-seed round.
Goat Capital led the most recent funding round, which also included FoundersX, Rebel Fund, and a few previous backers like Y Combinator and Byld Ventures.
Among the few BaaS providers in Nigeria, Anchor competes with JUMO, Maplerad, OnePipe, and Bloc in the country’s fintech market.
Segun Adeyemi, co-founder and CEO of Anchor, commented on the new fundraising, saying the company had learned some lessons from the industry in the previous year, including setting fair prices, creating revenue sources that benefit customers, and re-engineering its compliance procedures. He claimed that the corporation will double down on those areas with the most recent cash.
“We want to improve our end-to-end compliance system, invest in value-added products like our ledger system, and onboard more customers,” he said.
The Nigerian startup is also planning expansion to other African countries, which motivated Goat Capital’s investment. Partner at lead investor Goat Capital, Justin Kan, said:
“The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and showing signs of becoming the category leader, which is something we look out for in our portfolio companies.”
By providing fintech services for these businesses, the YC-backed fintech claims to have earned more than $550 million in annualised total transaction volume (TTV).
Likewise, according to the chief executive, revenue is growing by 30% month over month. The company makes money from processing fees, account and card issuing fees, and interest from the float.
Anchor collaborates with licensed financial institutions. It asserts that by doing this, businesses can reduce the time it takes to develop financial products from years to days. When the fintech first started, it solely served customer accounts.
Adeyemi said that Anchor’s APIs now handle cross-border payments, business accounts, card issuance, bill payments, bulk disbursements, and developer-only capabilities like developer webhooks and an audit log system.
According to a recent analysis by Ernst & Young, the worldwide embedded finance market is predicted to increase across the whole value chain from US$264 billion in 2021 to US$606 billion in 2025.