Anchor, a pioneering pan-African Banking-as-a-Service (BaaS) provider, has announced a successful seed funding round of $2.4 million. The capital injection will be utilised to launch new products, bolster licensing and compliance infrastructure, and assess potential expansion markets.
The funding round was spearheaded by Goat Capital, with participation from FoundersX, Rebel Fund, Y Combinator, and other esteemed investors. Byld Ventures, the primary investor in the pre-seed round, also participated in this seed round.
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Anchor, which made its debut in August 2022, simplifies the process of creating banking products, reducing the timeline from years to mere days. Through partnerships with regulated banking institutions, Anchor offers APIs that empower customers to create bank accounts, issue cards, facilitate seamless payments, and offer savings and investment products.
Segun Adeyemi, CEO and co-founder of Anchor, expressed his enthusiasm about the funding round, saying, “We are thrilled to have gathered such strong support from investors who share our vision of expanding access to financial choices through BaaS and embedded finance. This has been a significant journey for the Anchor team after our pre-seed raise last year. We have grown tremendously and increased our impact across various clients and customer segments in Africa.”
Just a year ago, Anchor emerged from stealth mode with a $1 million pre-seed funding and a handful of early customers. Today, the company boasts over $550 million in annualised total transaction volume (TTV), with revenue experiencing a 30% month-on-month (MoM) growth rate.
Their clientele includes prominent names such as SeamlessHR, Bujeti, Zit, Penne, and LifeBank. Anchor’s recent partnership with the fintech arm of Africa’s largest telecom, MTN MoMo PSB, promises to further propel its growth.
On a global scale, the embedded finance market is projected to reach $384.8 billion by 2029, with a compound annual growth rate (CAGR) of 30%. Africa is set to account for 10% of this market, reaching an estimated $40 billion by 2029, driven by a CAGR of 33.2%. Anchor’s home market, Nigeria, presents substantial growth potential with a total addressable market (TAM) of at least $7 billion.
Adeyemi emphasised, “This funding allows us to build out complementary parts of our core BaaS platform, strengthen our compliance infrastructure, and offer other value-added services. We are going beyond just offering banking APIs; we are empowering our customers with insights into customer behaviours, preferences, and financial trends.”
Commenting on their investment in Anchor, Justin Kan, partner at Goat Capital, stated, “The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and showing signs of becoming the category leader which is something we look out for in our portfolio companies. We are excited to partner with Segun and the team to leverage BaaS solutions to create financial prosperity for the continent.”
Anchor’s overarching mission is to drive financial access and prosperity by enabling more participants to enter the digital financial services space without the need for costly infrastructure development or regulatory concerns. The newly raised funds will be allocated toward strengthening licensing and compliance infrastructure, launching innovative products, and exploring potential expansion markets.