FinTech firm, Stitch secured a seed round of $4m, making it the largest round raised by any API startup in Africa at the moment.
Led by firstminute Capital and The Raba Partnership, the seed round saw funding from angels as well as VCs including CRE, Village Global, Future Africa, 500 Fintech and Norrsken – a fund run by Klarna co-founder Niklas Adalberth. Angel investors taking part in the round included Venmo co-founder Iqram Magdon Ismail, founding members at Plaid, Coinbase executives, Revolut, Fast and Paystack.
Commenting on the firm’s seed round, founder Kiaan Pillay told TechCrunch, “Spending a lot of time in San Francisco when working with Smile has helped us to get in touch with these globally world-class founders and investors. There’s an opportunity for us to provide a new generation of financial services in markets across Africa, and we’re really fortunate to have them back us.”
Stitch aims to provide full API access to financial accounts across Africa. With its API, developers can connect apps to financial accounts allowing users to share their transaction history and balances, confirm their identities as well as initiate payments. Furthermore, it offers services including personal finance, lending, insurance, payments and wealth management to companies and developers.
With the investor backing it achieved, Stitch plans to use the funding to consolidate growth in South Africa and launch operations in West and East Africa.
Building on how the idea came about, Pillay said that the goal was to find a way to let users cash out from their wallet to their bank account. “We did this manually at first and then as a stopgap, we automated the process using screen scraping. We realised that the automated solution to this manual problem could be a product by itself and that there were more elegant ways to do it,” he said, adding that that’s when Stitch was birthed.
Despite being in early stages, Stitch has already attracted a handful of clients which include Intelligent Debt Management, Momentum Velocity Club, and FlexClub.
Co-founder and general partner of firstminute capital Brent Hoberman said that the key reason the firm decided to back Stitch was due to the growth in the African FinTech ecosystem.
With the proliferation of online businesses in Africa, the need for facilitating online payments and increasing lending capacity will become increasingly essential therefore causing firms such as Stitch to scale up, he said.
It’s easy to see the upward graph in FinTech firms in the region. South African digital bank TymeBank just raised $109m to expand across the country and into Asia.
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