• Tuesday, September 26, 2023
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What Chaka’s $1.5m pre-seed funding means for borderless investment in Africa

What Chaka’s $1.5m pre-seed funding means for borderless investment in Africa

SEC-Licensed Digital Sub-broker and leading digital investment platform, Chaka Technologies, has raised $1.5M in a pre-seed funding round led by Breyer Capital, premier global venture capital and private equity firm focused on catalysing growth in high-impact tech companies like Spotify and Facebook.

Other participants in the round are 4DX Ventures, Golden Palm Investments, Future Africa, Seedstars, and Musha Ventures.

This funding will serve as a catalyst to enable Chaka to continue to power on its mission to enable borderless investments across Africa and deliver digital investments solutions for African businesses.

It will also be used towards the expansion of Fintech’s footprints in West Africa to reach more retail investors and attract more foreign players to African Capital Markets.

Commenting on the funding secured, Tosin Osibodu, co-founder & CEO, Chaka Technologies said “This is indeed a significant milestone for us at Chaka. We see digital investments as an opportunity to boost economic transformation in Africa, and our goal is to use this funding to bring this vision to life.

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“With this capital, we will focus on our goals to build a roster of formidable partners and accelerate our expansion to other markets within Africa. This investment also enables us to hire top talent and integrate more advanced functionalities into our investment and wealth management solutions for businesses.”

“Our mission remains the same and we are excited to be backed by VCs like Breyer Capital that trust us and are extremely optimistic of the possibilities that exist for Chaka and Africa,” he added.

Also commenting on this feat, Jim Breyer, CEO of Breyer Capital, said “We are proud to combine efforts with a company that is levelling the investment playing field for Nigerians (and Africans at large). We’re confident in the value Chaka provides through its digital tools, and we look forward to playing our part in supporting Chaka’s team on their mission to drive borderless investments in Africa.”

This pre-seed round comes on the heels of the Chaka becoming the first start-up to acquire the new digital sub-broker license issued by the Nigeria’s Securities and Exchange Commission (SEC), in line with the regulator’s efforts to safeguard the investing public and accelerate innovation within the sector.

Chaka recently obtained the SEClicence titled Digital Sub-Broker/Sub-Broker Serving Multiple Brokers through a digital platform. It is the first fintech licence to be issued by the SEC whose aim is now on increasing the number of Nigerians that are financially included and are investing in the Nigeria capital market. It is highly unlikely to be the last one, as it is expected that more digital investing apps would be granted licence in the coming months.

Ike Williams, Resident Advisor Digital Transformation at SEC alluded to this at a recent webinar organised by the Commission. According to him, the SEC had received several applications which are currently undergoing processing. Williams said the applications would get the required attention they deserve given that the Commission is sufficiently aware that the global investment climate has changed and it has become imperative to ensure that every player is involved in expanding financial services to all Nigerians wherever they are located.

Before now, the Nigerian capital market has struggled to attract the younger generation, particularly the millennials mainly because the process of customer onboarding was too technical and mostly paper-driven. The returns on investment were also seen as not attractive particularly against a weakening naira.

Chaka’s licence opens the door to young Nigerians with new capital to invest in the market. The capital market in Nigeria, just like many others, is at a transitional period where it has the opportunity to adapt to digital trends and technologies as well as innovate with new business models and products and services.

“We want to make it easier for foreign investors to have access to Nigerian stocks and for Nigerians in the diaspora to evangelise the market making it possible for someone in Germany to wake up in the morning to trade stocks on the Nigerian stock exchange,” Osibodu said.

Since Chaka’s launch in 2019, the platform has levelled the barriers of entry for borderless investments in Nigeria by providing customers with compliant access to the capital market.

Chaka’s bouquet of products includes a stock trading app for retail investors, Chaka SDK which enables asset managers and financial institutions to offer digital investments to their customers; and Chaka for Business which enables direct business onboarding and provides powerful trading tools for institutional investors.