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Nigeria’s Anchor, a banking-as-a-service (BaaS) provider, has secured $2.4 million in seed investment led by Justin Kan’s Goat Capital. The funding round also saw participation from FoundersX, Rebel Fund, and existing investors, including Y Combinator and Byld Ventures.
Anchor, which emerged from stealth mode last year with over $1 million in pre-seed funding, aims to facilitate the development of banking solutions through its APIs, dashboards, and tools for developers. In Nigeria’s competitive fintech landscape, Anchor competes with players like JUMO, Maplerad, OnePipe, and Bloc.
The company partners with regulated banking institutions to expedite the process of building banking products, reducing the timeline from years to days. Initially focused on customer accounts, Anchor’s offerings have expanded to support business accounts, card issuance, bill payments, bulk disbursements, cross-border payments, and developer-centric features like an audit log system and developer webhooks.
Anchor went live in August 2022 and currently serves around 270 clients, with approximately 63 actively transacting on the platform. The diverse clientele includes fintechs, SaaS firms, e-commerce enterprises, and other tech-enabled businesses, such as Bujeti, Pennee, SeamlessHR, LifeBank, Waza, and Zit.ng.
The fintech reports having facilitated over $550 million in annualized total transaction volume (TTV) for its clients and is experiencing monthly revenue growth of 30%. Revenue streams include processing fees, account and card issuance fees, and interest income on float.
Despite the challenges of onboarding non-digital native firms initially, Anchor recognized the potential in digitally ready and tech-enabled businesses. The company has learned valuable lessons in pricing, revenue generation, and compliance during its first year and plans to double down on these areas following this funding round.
Anchor is well-positioned to tap into Africa‘s growing embedded finance market, projected to be worth $384.8 billion by 2029. Africa is set to account for 10% of this industry, with Anchor targeting a $7 billion addressable market in Nigeria. The fintech is also exploring the possibility of pan-African expansion in the future.
Justin Kan, a partner at lead investor Goat Capital, expressed optimism about Anchor’s potential, noting its impressive growth rate in a nascent but rapidly expanding market.
Please note that all figures and growth projections are based on available information at the time of reporting and are subject to change.