Anchor, a prominent provider of Banking-as-a-Service (BaaS) across Africa, has just completed a successful Seed round, securing $2.4 million in funding. The company intends to utilize this capital injection to introduce new products, reinforce its licensing and compliance infrastructure, and assess potential expansion opportunities.
Goat Capital led this funding round, with contributions from FoundersX, Rebel Fund, and other renowned investors like Y Combinator. Byld Ventures, the lead investor in the pre-seed round, also participated in this new funding initiative.
Segun Adeyemi, the CEO and co-founder of Anchor, expressed excitement about the substantial support garnered from investors who share their vision of broadening access to financial options through BaaS and embedded finance. He emphasized the significant progress made by the Anchor team since their pre-seed funding round the previous year, highlighting their substantial growth and increased impact on diverse clients and customer segments across Africa.
Anchor’s primary objective is to empower more players to enter the digital financial services arena without the burden of costly infrastructure development or regulatory challenges. The funds acquired in this round will be dedicated to strengthening licensing and compliance infrastructure, launching innovative products, and exploring opportunities in new markets.
Launched in August 2022, Anchor’s BaaS platform simplifies the creation of banking products, reducing the timeline from years to mere days. Through partnerships with regulated banking institutions, Anchor’s APIs enable its customers to seamlessly establish bank accounts, issue cards, facilitate payments, and provide savings and investment products
Anchor stands as a premier banking-as-a-service and embedded platform designed for African businesses, furnishing them with the necessary infrastructure and tools to develop, integrate, and launch financial products.
Just one year ago, the company emerged from stealth mode with a $1 million pre-seed funding and a few early clients. Today, Anchor boasts an annualized total transaction volume (TTV) exceeding $550 million, with revenue experiencing a remarkable 30% month-on-month (MoM) growth.
Their clientele includes notable names such as SeamlessHR, Bujeti, Zit, Penne, and LifeBank. Additionally, a recent partnership with MTN MoMo PSB, the fintech arm of Africa’s largest telecom company in Nigeria, promises to accelerate Anchor’s growth further.
On a global scale, the embedded finance market is projected to reach $384.8 billion by 2029, boasting a Compound Annual Growth Rate (CAGR) of 30%. Africa is expected to contribute 10% to this market, with projected growth reaching $40 billion by 2029, marked by a similar CAGR of 33.2%.
Anchor’s home market, Nigeria, offers substantial potential with a Total Addressable Market (TAM) of at least $7 billion, highlighting the significant growth prospects for this seed-stage company.
CEO Adeyemi emphasized that Anchor’s role extends beyond merely providing banking APIs to customers. They aim to empower clients with insights into customer behavior, preferences, and financial trends, enabling them to better serve their customers.
With this fresh injection of funding, Anchor plans to further develop complementary elements of its core BaaS platform, fortify its compliance infrastructure, and introduce other value-added services.
Justin Kan, Partner at Goat Capital, shared insights into their investment in Anchor, acknowledging Africa’s nascent yet rapidly growing embedded finance market, boasting a CAGR of over 30%.
Kan expressed excitement about Anchor’s impressive growth rate, positioning them as potential category leaders, aligning with Goat Capital’s investment strategy aimed at fostering financial prosperity across the continent through BaaS solutions.