Afriex, a crypto remittance platform based in Lagos and San Francisco, has raised $1.2 million in seed round funding, with investors such as Launch Africa, Mandela Schumacher-Hodge Dixon, SoftBank Opportunity Fund, Y Combinator, and A$AP Capital.
Afriex was founded in 2019 by two Nigerians, Tope Alabi and John Obirije, after they had difficulty sending money to Nigeria from the US.
“We would go back home every two years, and even then, I would always take note of what was missing and what could be improved,” said Alabi. “I would find myself having to pay for foreign expenses with money that was sitting in a US bank account. Traditional remittance companies were so slow and expensive that I knew I could do it better with crypto. Remittance is the best and most important use case for crypto. Our goal is to build the world’s largest remittance company, starting with emerging markets.”
Afriex allows users to make instant, zero-fee monetary transfers from the US to anywhere in Africa using cutting-edge blockchain technology to ensure the safety of finances. It currently provides services to 50,000 active users across more than 30 countries and has processed up to $10 million in transactions.
The new investment is aimed at funding its expansion into new markets and achieving its long-term goal of becoming the fastest and cheapest platform for sending money anywhere in the world.
Remittances are a goldmine in terms of business opportunities—remittances to Sub-Saharan Africa totaled $48 billion in 2019. Afriex is aiming for a larger share of that market, going up against international competitors like Wise and Western Union, the latter of whom it says charges “some of the highest fees you’ll run into.” By opting for a non-traditional banking system in stablecoins (a form of cryptocurrency that avoids the instability caused by inflation), it is able to charge lower rates and transfer funds in minutes.
“We don’t have to hold inflationary currencies—we can just hold USD, and crypto allows us to source better exchange rates,” Alabi noted.
Kanyinsola Olorunnisola is a journalist, social critic and literary enthusiast. He is the recepient of the 2017 Fisayo Soyombo National Essay Prize, the 2020 Speculative Literary Foundation’s Diverse Writers Grant and the 2020 K&L Prize for African Literature. He is the founder of SprinNG, a platform dedicated to the development of young African writers.