The provision of virtual foreign bank accounts has become a common strategy for fintechs to enable Nigerians and Africans to facilitate international transfers. In the latest development, Grey, a fintech in this category that provides virtual international bank accounts to African freelancers and remote workers, is announcing that it has raised $2 million in seed funding.
Idorenyin Obong and Femi Aghedo founded Grey in July 2020 as an instant exchange service to help Nigerians exchange foreign currencies in their domiciliary account for local money — the naira. Last year, the startup raised an undisclosed pre-seed investment and got accepted into YC’s winter batch this March.
The YC-backed Nigerian fintech has since expanded into East Africa, starting with Kenya. CEO Obong told TechCrunch that partnerships with two companies in Kenya, payments giant Cellulant and edtech upstart Moringa, accompanied the move.
“We went with Cellulant to power our payment infrastructure for Kenyan shillings,” said the chief executive. “Moringa is like an avenue and channel for training new tech talent, so it made sense to have such a partnership as we are trying to build this for freelancers.”
Thus, users in Nigeria and Kenya can receive foreign payments from more than 88 countries using USD, GBP and EUR bank accounts created on the platform, convert them into their local currencies (naira and shilling) and withdraw directly to their mobile money or local bank account. They can also send money to the U.K. and Europe on the platform. Grey has also upped its functionality to support payouts in another East African currency: Ugandan shillings, bringing the total number of supported currencies to six. Although it is yet to launch in the country, Obong said Uganda is in Grey’s regional purview as well as fellow East African country Tanzania; the fintech will expand into the latter within a month, he added.
Grey claims to have about 100,000 individual users, and since the beginning of the year, its transaction volumes have increased by 200%. COO Aghedo said the company privately launched a business-focused product, Grey Business, to complement this consumer-facing growth and extend its product beyond remittances and person-to-person payments.
The lack of interoperability between African currencies is one reason businesses on the continent use the dollar to pay one another instead of local currencies. Platforms like Verto, a global B2B payments platform that allows African businesses to make international payments via multicurrency wallets, are tackling this problem. With its Grey Business product, the one-year-old fintech intends to tap into the market and provide a cheaper option to send and receive local currencies within the continent, particularly for micro and small businesses.
Grey Business has been in private beta for the last two months and the seed investment will help to launch it publicly across Nigeria and Kenya. Investors in the round include venture firms such as Y Combinator, Soma Capital, Heirloom Fund and True Culture Fund, and angels like Alan Rutledge, Samvit Ramadurgam and Karthik Ramakrishnan. Startups offering similar services include the likes of Techstars-backed PayDay.
“Grey was founded to empower people to live a location-independent lifestyle. “I believe that the least of your worries as a freelancer, remote worker, or digital nomad should be sending or receiving payments, so we’ve made it easy,” said CEO Obong. “We like to say that we’re on a mission to make international payments as easy as sending an email. We want to do impactful work to improve how Africa as a continent interacts with money across its borders.”