Nigerian fintech Cleva is disrupting the financial landscape in Africa with its innovative banking platform. Their goal is to make it easier for individuals and businesses to receive international payments by opening USD accounts. Recently, the company raised an impressive $1.5 million in pre-seed funding.
“The team is uniquely qualified to address this given their experience building banking products at Stripe and robust platforms at AWS. The impressive early growth is a testament to the team’s unique capacity to execute across Africa and the U.S.” – Aaron Michael, Partner at 1984 Ventures
Leading the round was 1984 Ventures, a San Francisco-based venture capital firm that specializes in early-stage investments. Other participants included The Raba Partnership, Byld Ventures, FirstCheck Africa, and several angel investors.
Their product has already caught the attention of renowned startup accelerator Y Combinator, who participated in Cleva’s pre-seed round. The fintech will begin their involvement in the accelerator’s winter 2024 batch this month. Y Combinator has previously backed other African startups, such as Grey Finance and Elevate (formerly Bloom), that help freelancers and remote workers open U.S. bank accounts for payments, savings, and currency exchange.
In an interview with TechCrunch, CEO Tolu Alabi and co-founder Philip Abel explained their vision for Cleva. They both have a strong connection to the African market, having been born and raised in Nigeria before moving to the U.S. for college. Their previous experience at major tech companies like Amazon, Stripe, AWS, and Twilio brings valuable insight and expertise to Cleva.
Alabi elaborated on the decision to launch the platform in August, despite facing competition from other platforms like Geegpay and Payday, saying, “The problem we’re trying to solve, which is enabling people to receive international payments, is not a Nigerian problem nor an African one. It’s a global problem.” They estimate that facilitating payments for remote workers and freelancers in Africa is an $18 billion opportunity.
Cleva differentiates itself from the competition in two key areas: customer experience and business model. Alabi emphasized the importance of going above and beyond for their customers, and the positive feedback they have received for their responsive customer support. On the business side, Cleva generates revenue through fund swaps and exchanges, charging a 0.9% fee on deposits into users’ USD accounts. They are also one of the few platforms that have a cap on fees, making them a more cost-effective option for customers.
The startup has already seen significant success in the four months since its launch, with “thousands” of Nigerians using the platform to open U.S. accounts. They have processed over $1 million in monthly payments and experienced 100% month-on-month revenue growth. Looking ahead, the company has several upcoming products in the pipeline, including USD cards and savings in U.S. assets.
Cleva is also expanding its target market to include Africans in the diaspora, with plans to offer services such as creating professional invoices and sending USD globally. This aligns with the trend of a globalizing world, where more young Africans are upskilling and exporting their talents to meet the demand for skilled individuals.
CTO Abel shared the company’s long-term vision, saying, “We are open to Cleva evolving from just being a product-only service to being a platform issuing APIs to do a bunch of other things that help us distribute services across other African countries or around the world.” This future roadmap will help Cleva tap into the growing market for fintechs focused on freelancers and Africans in the diaspora.
The total addressable market for this sector is set for sustained growth, making Cleva well-positioned to succeed. With their experienced team, unique product, and future plans for expansion, Cleva is poised to disrupt and revolutionize the way Africans receive international payments.
