In a significant move toward expanding its product offerings, Nigerian fintech startup Anchor has successfully raised $2.4 million in a seed round.
This latest funding injection comes just a year after the banking-as-a-service (BaaS) provider secured over $1 million in a pre-seed round, bringing its total funding to an impressive $3.4 million.
Growing Support from Key Investors
The seed round was led by Goat Capital, with participation from FoundersX, Rebel Fund, and existing investors, including Y Combinator and Byld Ventures.
This backing highlights the growing interest in Anchor’s potential within the fintech space.
Feed Back from Anchor’s Founder
Segun Adeyemi, co-founder and CEO of Anchor, discussed the company’s recent experiences and lessons learned in the industry.
These lessons include determining appropriate pricing strategies, developing revenue sources that positively impact customers’ bottom lines, and re-engineering compliance processes.
With this new funding, Anchor aims to double down on these areas, particularly enhancing its end-to-end compliance system and introducing value-added products like their ledger system.
Plans for Expansion
Beyond its core operations, Anchor has ambitious plans to expand its footprint across other African countries, a move that attracted Goat Capital’s investment.
Justin Kan, a partner at lead investor Goat Capital, recognizes the impressive growth rate of Anchor within the embedded finance market, noting its potential to become a category leader.
The embedded finance market in Africa is showing strong growth at over 30% CAGR, making Anchor’s growth trajectory particularly noteworthy.
Driving Fintech Services for Enterprises
Anchor has achieved substantial milestones, claiming to have generated more than $550 million in annualized total transaction volume (TTV) by enabling fintech services for various enterprises.
Its revenue is also on the rise, with a 30% month-on-month increase. The firm generates income through processing fees, account and card issuance fees, and interest income on the float.
Supporting Business Accounts and More
Initially focused on customer accounts, Anchor has expanded its services. The fintech now supports business accounts, card issuance, bill payments, bulk disbursements, cross-border payments, and developer-only features such as an audit log system and developer webhooks.
By partnering with regulated banking institutions, Anchor streamlines the process of building banking products, reducing the timeline from years to days.
A Growing Market
According to a recent report by Ernst & Young, the global embedded finance market is set to see significant growth, estimated to increase from US$264 billion in 2021 to US$606 billion in 2025 across the entire value chain.
This underscores the immense potential and opportunities within the fintech industry, further fuelling Anchor’s aspirations for growth and innovation.
Notable Comment
Segun Adeyemi, CEO of Anchor, regarding the funding round, said:
“We want to improve our end-to-end compliance system, invest in value-added products like our ledger system, and onboard more customers.”
Justin Kan, Partner at Goat Capital, on Anchor’s growth:
“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.”
