Yep!, a financial super-app, has raised $1.5 million in a pre-seed funding round led by Greenhouse Capital to launch its revolutionary new digital financial super app on iOS and Android in five African countries (Nigeria, Niger, Togo, Ivory Coast, and Burkina Faso).
With the funding, Yep! aims to double its existing network of about 100,000 merchants to over 200,000 by the end of 2022 and raise its debt facility to $10 million by the end of this year to scale its lending operations.
According to Yep! Co-Founder Olaoluwa Awojoodu: “We have secured a $500,000 credit facility that will enable us to kick-start the provision of working capital loans to our existing merchants as we expand across the continent. As we strive to deliver on our promise of bringing financial access to all Africans and connecting Africans to the world, increasing Yep!’s lending capacity will be a key catalyst in pulling more customers and merchants into our ecosystem. Access to finance can be transformative – it unlocks opportunities among those that need it the most and has a huge impact on the wider economy.”
Targeting Africa’s unbanked, underserved and micro, small and medium enterprises (MSMEs) to boost financial inclusion, Yep! aims to leverage its existing merchant network, PayCentre Africa, to ease entry into the formal economy for rural communities, who would otherwise be financially excluded. The company’s services enable entrepreneurs, small business owners, students, MSMEs, and merchants to gain safe and easy access to financial solutions digitally.
Airende Ojeomogha, Co-founder, Yep! said: “The informal sector is the backbone of economic activity in Africa and accounts for over 80% of jobs in cities across the continent. However, populations and businesses in this segment often do not have the necessary tools to grow and scale – due to restricted access to financial services that enhance growth, such as savings and credit facilities. With our network of around 100,000 merchants spread across West Africa, we get to hear from millions of customers and businesses, so we know our customers’ challenges. This strengthens our ability to build and provide the right products that eradicate their pain points and respond to evolving needs.”
In 2021 alone, over 5 million customers transacted more than $2 billion through the company’s growing network of merchants. In an attempt to close the loop, bank these customers; Yep! secured a microfinance bank (MFB) licence in Nigeria, enabling the company to set up accounts for customers, businesses, and merchants, in a matter of seconds.
The firm is exploring partnerships with leading U.S. banks and service providers to expand its products to customers in the U.S., building on remittance flows to Africa from the diaspora and migrants from the region. Product lines across the Atlantic will include low-cost and freely accessible remittances to African countries, free checking and saving accounts and a credit card to start.
In recent years, remittance flows to low and middle income have soared as high as $550 billion, a figure that does not include sums transferred through informal channels.
With banks and money transfer services temporarily closed during the Covid-19 pandemic, millions of customers turned to online remittances, which continue to provide vital support to families affected by economic hardship or facing increasing costs for school. According to data from the World Bank, remittance inflows to Sub-Saharan Africa rose in 2021, rising by 6.2% to $45 billion.
As migration flows from the continent are expected to increase, and digitisation paces ahead, remittances to sub-Saharan Africa are set to receive unprecedented growth, a trend Yep! is sure to benefit from.
Garry Ottosen, Co-founder, Yep!, said: “We want to create a disruptive financial platform that democratises access to financial services and economic opportunities for both retail and business customers across Africa. Yep! succeeds only when our customers do.”
Greenhouse Capital led the $1.5 million investment round, adding the firm to its portfolio of pioneering companies in Africa, including Y.C. companies Flutterwave, Credpal, and Helium health.
Ruby Nimkar, Partner at Greenhouse Capital stated why they invested in Yep! saying, “We are excited to support Olaoluwa, Airende and Garry as they make financial services accessible to consumers and businesses both on the continent, as well as in the diaspora. The founders are seasoned operators and we were impressed by the vision, the team and the speed of execution.”