When Tope Alabi moved back to Nigeria in 2019 after 20 years in the U.S., he knew he wanted to start a company applying what he learned working at blockchain consultant Consensys. He and future cofounder John Obirije started testing a number of ideas ranging from a hip hop chat bot to a trivia game — all of which failed. But they realized throughout the trial and error that they consistently ran into the same problem: trying to pay business expenses for the various upstarts with money tied up in bank accounts in the U.S.
They decided to create a money transfer system that utilized blockchain to enable users to send funds by converting them into stablecoins — which are cryptocurrencies backed by reserve assets. This process makes the transaction free and quicker than an existing service like Wise which charges a 6.45% fee and can take a few days to process. They launched the service, Afriex, in 2019 and the traction was instant. “Things took off from there,” Alabi tells Forbes. “I don’t know if it was the pandemic but we really started growing fast.” The service originally focused on Nigeria and has since expanded into Uganda, Kenya and Ghana.
Afriex launched amongst an explosion of fintech companies targeting underserved, and often overlooked, consumers in Africa. Data from CB Insights found that more than $1.4 billion was invested into African fintech companies in 2021, a nearly 7x increase over 2020. Fintech companies raised more than half of the $2.2 billion total of venture capital funding across the continent in 2021. One possible reason these companies are gobbling up capital is because they are seeing strong traction.