API fintech company Stitch has raised a $21 million Series A funding round to link bank accounts, wallets and other stores of value in a bid to significantly reduce conversion time and cost for its payments and data customers across the fintech ecosystem riddled with technical, commercial and political barriers.
Stitch will use the funding to expand its team, launch new product offerings and enter new markets across the continent with its “financial graph”- a payments and data infrastructure that enables players across the fintech ecosystem to transact seamlessly, expand their revenue and growth potential.
“We are incredibly fortunate to be supported by some of the best investors, founders and builders in the fintech space globally,” said Stitch co-founder & CEO Kiaan Pillay. “They are working closely with us to enable the boom we’re seeing in financial technology on the continent. Across the hundreds of customers we work with, big and small, we’re witnessing a record pace of development of new financial products. Our goal is to help fast-growing fintech and embedded finance companies more easily launch increasingly innovative and tailored products, expand into new markets and optimize their solutions – so they can grow even faster.”
The round was led by The Spruce House Capital, with new investors PayPal Ventures, TrueLayer and Zinal Growth, among others joining the round. Existing investors including firstminute capital, The Raba Partnership, CRE Venture Capital and Village Global also participated, as did founders of leading global fintechs including Chipper Cash, Quovo and Unit. The company had announced a $6 million seed round last year after it emerged from stealth in February 2021.
“We have been following startups in Africa for many years. Our diligence was very clear that this is one of the most talented teams on the continent, and we are excited to be a part of what they are building at Stitch,” said Ben Stein, co-founder of The Spruce House Partnership.
The Stitch API enables businesses to easily access and link their users’ financial accounts to initiate secure bank transfers for one-click pay-ins and payouts, access standardized and categorized transaction history and balance data, for affordability checks and income estimation assessments, and to verify account information and ownership, to enable faster and more user-friendly digital onboarding, and to perform fraud checks.
Startups in Africa raised a record $4 billion in 2021, with the vast majority (estimated 62%) going to fintechs. Stitch serves these fast-growing businesses, from wallet-based companies like Chipper Cash, Luno and Zapper, to financial services providers like ImaliPay, to subscription and e-commerce players like FlexClub, to PSPs and payment aggregators like Peach and Yoco. As embedded finance continues to gain traction and further adoption of digital finance solutions, the opportunity to provide foundational software that can enable businesses to launch, optimize and scale fintech solutions will only accelerate.
“Stitch is building critical infrastructure to enable faster, easier and more secure payments across Africa,” said Ashish Aggarwal, Director at PayPal Ventures. “We believe they will play a significant role in contributing to the overall growth of the fintech space in Africa – and are excited to be investing at this important moment in their journey.”
