In a remarkable move that’s set to redefine the African fintech landscape, Nigerian startup Cleva has successfully raised $1.5 million in pre-seed funding. This innovative platform, spearheaded by Stripe and AWS veterans, is carving out a niche in the banking sector for African individuals and businesses, particularly in managing international payments through USD accounts.
Leading the funding round is 1984 Ventures, a San Francisco-based early-stage venture capital firm, with notable contributions from The Raba Partnership, Byld Ventures, FirstCheck Africa, and a cadre of angel investors. Aaron Michael from 1984 Ventures lauds Cleva’s co-founders, Tolu Alabi and Philip Abel, for their insightful approach to tackling hyperinflation challenges in Africa, a sector ripe with potential.
Cleva’s journey gains additional momentum with its inclusion in Y Combinator’s winter 2024 batch. The accelerator, known for backing African startups like Grey Finance and Elevate, sees potential in Cleva’s mission to streamline banking solutions for freelancers and remote workers on the continent.
CEO Tolu Alabi offers insights into the rationale behind Cleva’s August launch, amidst a competitive landscape. The platform aims to address the persistent hurdles African professionals face in receiving international payments. According to Alabi, this market, serving remote workers and freelancers in Africa, is an $18 billion opportunity waiting to be tapped.
The founders of Cleva are deeply connected to their African roots. Both Alabi and Abel hail from Nigeria and pursued higher education in the U.S., attending prestigious institutions like MIT and Stanford. Their rich background in tech giants like Amazon, Stripe, AWS, and Twilio equips them with the perfect blend of technical know-how and market understanding to spearhead such an ambitious project.
Alabi emphasizes the global scale of the problem Cleva is addressing – the need for efficient international payment solutions transcends borders, touching lives in Latin America, Asia, and beyond. Starting with Nigeria, Cleva aims to leverage the founders’ expertise to solve this issue on a global level.
Since its launch, Cleva has been on a rapid growth trajectory. Within just four months, the fintech, based in Delaware and Lagos, has facilitated the opening of US-based accounts for thousands of Nigerians, processing over $1 million in monthly payments and witnessing a staggering 100% month-on-month revenue growth.
Cleva sets itself apart in two critical aspects: customer experience and business model. Their commitment to exceptional customer support and a capped fee structure on deposits into USD accounts differentiates them from competitors who often charge uncapped fees.
Looking forward, Cleva is not resting on its laurels. With plans to introduce USD cards and savings in U.S. assets, CTO Philip Abel shares their vision to diversify revenue streams. Additionally, targeting Africans in the diaspora is next on their agenda, expanding their suite of services to include professional invoicing and global USD transactions.
The potential market for fintech services catering to freelancers and the African diaspora is burgeoning. In a world where young Africans are increasingly upskilling to meet global demands, platforms like Cleva are pivotal in bridging the financial gap. Abel hints at an ambitious future for Cleva, envisioning a transition from a product-centric service to a comprehensive platform offering a range of APIs and services across Africa and the globe.
In summary, Cleva’s recent funding success is more than just a financial milestone; it’s a testament to the visionary approach of its founders and their commitment to revolutionizing fintech for Africans worldwide. As they navigate the challenges typical of fintech startups – from securing the right banking partners to attracting top talent – Cleva stands as a beacon of innovation and growth in the African fintech space.
