Cleva, a Nigeria fintech company has raised $1.5 million in pre-seed funding to enhance African individuals and businesses to receive international payments by opening USD accounts.
According to the company, its innovative approach focuses on improving banking in Africa by offering a much-needed service to the region’s growing economy. With this funding, Cleva wants to make substantial moves in its mission to enhance the banking industry in Africa.
The funding round, led by 1984 Ventures, a San Francisco-based early-stage venture capital firm, received support from notable participants, including The Raba Partnership, Byld Ventures, FirstCheck Africa, and several angel investors.
Aaron Michael, a partner at 1984 Ventures, commended Cleva’s founders, Tolu Alabi and Philip Abel, emphasizing the considerable opportunity their product presents in addressing hyperinflation challenges faced by Africans.
“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.,” he said.
In a recent discussion, Michael shared his belief in the team’s abilities and their potential to succeed. He highlighted their past experiences in building banking products while working at Stripe, which included developing robust platforms at AWS.
Michael’s confidence in the team’s skills came at an opportune time, as Cleva began its involvement in Y Combinator’s winter 2024 batch, with Y Combinator also participating in the pre-seed round. Such strong support and expertise sets Cleva in a position where it can make a strong impact in the journey towards success.
Tolu Alabi, CEO of Cleva highlighted the persistent challenges Africans encounter in receiving international payments, estimating the market opportunity for facilitating payments for remote workers and freelancers in Africa to be an $18 billion prospect. Alabi emphasised the global nature of the problem, asserting that people worldwide, including Latin America, Asia, and Canada, need to receive dollars for their work and services.
Cleva’s founders, both born and raised in Nigeria, bring valuable technical and product experience from their roles at major tech companies like Amazon, Stripe, AWS, and Twilio. The fintech, initially launched for Nigerians, allows users to open USD accounts with onboarding requiring a Bank Verification Number (BVN) and a government-issued ID.
Since its launch, Cleva has facilitated the opening of US-based accounts for “thousands” of Nigerians, processing over $1 million in monthly payments with a month-on-month revenue growth of 100%, according to the CEO. The fintech differentiates itself through exceptional customer experience and a unique business model, charging a capped 0.9% fee on deposits into customers’ USD accounts, in contrast to competitors’ uncapped 1 percent fee.
Cleva plans to diversify its revenue streams with upcoming products, including USD cards and savings in U.S. assets. CTO Philip Abel outlined the company’s expansion plans, targeting Africans in the diaspora and entering the competitive remittance category. The fintech aims to leverage its unique offerings, such as creating professional invoices and facilitating global USD transfers, in a market where platforms like Flutterwave’s Send, Chipper Cash, Lemfi, and Afriex are active.
Cleva sees sustained growth in its total addressable market, envisioning growth beyond a product-only service to becoming a platform issuing APIs, thereby expanding its services across other African countries or globally.