South African Application Programming Interface (API) fintech company, Stitch on Thursday announced expansion into Nigeria, as well as a $2M seed extension with participation from leading global fintech entrepreneurs – bringing their total seed funding to $6M.
This comes just eight months after the team emerged from stealth and announced an initial $4M seed round.
Participating investors that facilitated the $2M seed extension include global fintech entrepreneurs Tom Blomfield, Co-Founder of Monzo; Matt Robinson, Co-Founder of GoCardless; Emilie Choi, President & COO of Coinbase; and Charlie Delingpole, Founder of ComplyAdvantage.
Stitch will initially offer a seamless, tokenized pay-by-bank product to help businesses and Fintechs in Nigeria improve their user experience, eliminate fraud and reduce fees associated with other payment methods, according to the South Africa-based company.
The need for fintech infrastructure that can address the challenges businesses face when it comes to scaling across a fragmented continent has been increasingly taking the spotlight in Africa’s startup space.
However, unlike other African open banking players who leverage screen scraping methods, Stitch said it uses multiple methodologies such as their unique portal emulation technology to ensure better stability, consistent uptime and a smoother user experience.
“Our goal is to become the go-to partner for any businesses building financial products in Africa. Access to the infrastructure Stitch is building can better enable these businesses to develop increasingly innovative solutions. They can now move money and access critical customer account data, while saving on costs, in hours rather than months,” Stitch co-founder & CEO, Kiaan Pillay, said.
Expressing his excitement to be launching in Nigeria, Pillay applauded Fintech founders and operators globally for their support, adding that “Nigeria is one of the most active markets on the continent, if not the world, for fintech. The opportunity we see here is endless.”
After speaking with over 50 Nigerian fintech companies, the Stitch team said it saw an overwhelming need for a more seamless and affordable payments solution.
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Nigeria-born innovators like Paystack and Flutterwave have pioneered online payments acceptance, but there is a significant opportunity to optimize the experience for businesses and users. Card, the method of choice for online payments providers in Nigeria today, has a much higher cost to convert, particularly for businesses that rely on large customer deposits, it said.
While the option to pay via bank transfer exists in Nigeria today, customers paying via their mobile or internet banking app must re-navigate to their bank platform to complete a transaction, resulting in a diminished user experience and a significant drop-off.
With Stitch, the API Fintech company said, users can initiate once-off, recurring, and user-not-present bank transfers without leaving the fintech product’s existing flow – and without the overhead and high costs of a standing or debit order.
The seed extension will enable Stitch to fast-track development, launch their solution and continue to grow the team on the ground in Nigeria, as they prepare to expand further across the continent, it said.
“Stitch is playing a critical role in building the infrastructure that can enable exponential growth for companies looking to scale digital finance solutions in Africa,” said Tom Blomfield, Co-founder of Monzo and GoCardless and an investor participating in Stitch’s seed extension.
“I see a lot of potential in African markets, where the wave of digital finance innovation is beginning to gain momentum, and the Stitch team is getting in at precisely the right time. The team is one of the best I’ve seen globally, and I’m excited to see them continue to grow in Nigeria and beyond.”
Stitch launched officially in South Africa in February 2021, with a data product that enables developers to connect their apps to users’ financial accounts, at which point users can share their transaction history and balances, confirm their identities and initiate payments.
They recently released their Payments solution, which offers a world-class payments experience with lower fees for providers and data-empowered use-cases such as ID-verified payments and account balance checking.
Since then, they’ve grown in data volume by 40-50% month-on-month, and are on track to facilitate $10M in monthly payments on the platform by the end of the year. Customers using Stitch consistently include Chipper Cash, Paystack, Franc, Sanlam, Yoco, Flexclub and more.
“We recently launched in the South African market, working with Stitch as an innovative payments partner to enable a first-class payments experience on our platform. We’re excited to welcome Stitch to the Nigerian market and look forward to working alongside them and others as we continue to evolve our product,” said Pardon Mujakachi, Vice President of Strategy & Partnerships at Stitch customer Chipper Cash.
Stitch is offering new clients free access to their Payments solution through the end of 2021.
