BusinessDay
NigeriaDecides2023

CrowdForce raises $3.5m to expand agent banking network in Nigeria

CrowdForce, a Nigerian Y Combinator-backed agency banking company, a $3.6 million pre series-A investment. The round, split between equity and debt, was led by Aruwa Capital Management with participation from HAVAÍC and AAIC.

CrowdForce will use the capital to expand its team, geographical operations and marketing to increase its agent network. CrowdForce aims to grow its 7,000 active agents three-fold this year. The Company will distribute more point of sale (PoS) terminals to small businesses including gas stations, pharmacies, and aggregators/resellers – which act as mobile bank branches.

CrowdForce is a financial services distribution platform that turns a merchant into a mobile bank branch within minutes. In 2015, Oluwatomi Ayorinde and Damilola Ayorinde founded MobileForms, a data analytics platform that provided insights on hard-to-reach rural and semi-peri urban populations for businesses, non-governmental organizations (NGOs), and development organizations.

Read also: What banks must do to overcome fintechs threat

“Fintechs and challenger banks are emerging in Africa to deliver better financial services via digital rails. It’s a fantastic development in the market, but cash is clearly still king in Nigeria. 97 percent of retail transactions happen offline,” Oluwatomi Ayorinde, CrowdForce CEO/co-founder, said.

According to the company, access to financial services in Nigeria remains a challenge. There are 4.8 bank branches and 19 automated teller machines (ATMs) per 100,000 adults, compared to the world average of 13 bank branches and 40 ATMs. Less than a one-third of Nigerian adults have access to a bank branch or ATM within one kilometer of where they live.

Unreliable infrastructure also undermines trust in the banking system – roughly 15 percent of card transactions fail on a POS. According to EFINA, 63.2 million of 99.6 million adults in Nigeria are financially included.

“There is a clear need to build an offline distribution network to enable fintechs and challengers to reach the mass market – this is exactly what we’re doing at CrowdForce. and this round will accelerate our momentum even more,” Ayorinde said.

Over the last three years, CrowdForce has partnered with cash-heavy small businesses, converting them to mobile bank branches while safely storing their cash on a PayForce digital wallet. The Company has partnered with 19,000 fuel stations, 20,0000 resellers, and 7,000 pharmacies to broaden its distribution network. CrowdForce aims to bring financial services within one kilometer, or within 15 minutes, of all Nigerians.

“We see significant value in the product as it is solving a real problem by providing access to critical financial services in rural areas that have been overlooked by traditional financial institutions. CrowdForce has unique competitive advantages through its proprietary technology and extensive agent distribution network across the country,” Adesuwa Okunbo Rhodes, Aruwa Capita, Founder and Managing Partner, said.