Cleva Raises $1.5M in Pre-Seed Funding for African Banking Platform
Nigeria-based fintech Cleva has recently announced that it secured $1.5 million in pre-seed funding. The funding round was led by 1984 Ventures, an early-stage venture capital firm based in the US. Other participants in the round included The Raba Partnership, Byld Ventures, FirstCheck Africa, and a number of angel investors. Cleva’s primary focus is to develop a banking platform that allows African individuals and businesses to receive international payments by opening USD accounts.
Objectives and Solutions of Cleva’s African Banking Platform
Representatives from 1984 Ventures expressed their support for Cleva, highlighting the significant opportunity the company’s product brings in enabling Africans to manage hyperinflation difficulties. In addition, Y Combinator, a renowned accelerator, also contributed to Cleva’s pre-seed round. Through its involvement in the accelerator’s winter 2024 batch, Cleva aims to further enhance its product and expand its reach. Previously, Y Combinator had backed African startups to assist freelancers and remote workers in the region in opening US bank accounts for receiving payments, savings, and currency exchange.
Officials from Cleva highlighted the challenges African individuals face when trying to receive international payments for their skills and products. The market for supporting payments for remote workers and freelancers in the region is estimated to be worth $18 billion. Cleva’s goal is to address this market gap and provide a reliable solution for Africans. The company also plans to extend its services outside Nigeria in the future, recognizing that difficulties in receiving payments are not limited to Nigeria or Africa alone.
Cleva’s Expansion Plans Include Services Outside Nigeria
While Cleva initially introduced its banking platform to Nigerian users, the company has ambitious plans to expand its services beyond Nigeria. Individuals in countries across Latin America, Asia, and Canada face similar challenges when it comes to collecting payment for their work and services. By addressing the needs of a wider international market, Cleva aims to become a global player in the fintech industry. The company emphasizes providing an improved customer experience and offering responsive customer support.
Strategy of Development for Cleva’s Banking Platform
Currently, Cleva generates revenue through fund exchanges in users’ USD accounts for the local currency. The company also charges a 0.9% fee on deposits into users’ USD accounts, with a cap of $20 on fees. To diversify its revenue streams, Cleva plans to launch several new products, including USD cards, savings in US assets, and targeting Africans working abroad. By enabling individuals to develop professional invoices and send USD worldwide, Cleva intends to enter the remittance category. This expansion into additional services will allow Cleva to position itself as a comprehensive banking platform.
Cleva Aims to Become a Platform Providing APIs for African and Global Services
Looking to the future, Cleva’s long-term strategy involves transitioning from being a product-only service to becoming a platform that offers APIs. This strategic move will enable Cleva to distribute its services across other African countries and even on a global scale. By providing APIs, Cleva aims to facilitate the integration of its banking platform with other financial services and institutions, further expanding its reach and impact.
In conclusion, with the recent funding secured, Cleva is well-positioned to continue developing its African banking platform. By addressing the challenges faced by Africans in receiving international payments and offering innovative products and solutions, the company aims to become a leading player in the fintech industry. With its expansion plans into new markets and the strategic development of its platform, Cleva is poised to make a significant impact on the financial landscape in Africa and beyond.
Analyst comment
Positive news. Cleva’s $1.5 million funding will support the development of its African banking platform, allowing individuals and businesses to receive international payments. The market gap for supporting payments in Africa is estimated to be worth $18 billion. Cleva aims to expand its services beyond Nigeria and become a global player in the fintech industry. With plans for new products and the transition to a platform offering APIs, Cleva is well-positioned to make a significant impact on the financial landscape in Africa and beyond.
