Stitch raises $21M in Spruce House led Series A

South African fintech API Stitch closed a $21 million Series A funding round that drew participation from The Spruce House Partnership, PayPal Ventures and TrueLayer among a mix of global and local investors. This investment will allow the company to expand its API and help more clients link bank accounts, wallets and stores of value to its financial graph.

Stitch will use the funding to continue building the future of money movement

The African start-up market raised a record $4 billion in 2021, with around 62 percent 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, and subscription and e-commerce players like FlexClub, as well as PSPs and payment aggregators like Peach and Yoco.

As embedded finance continues to gain traction and further adoption of digital finance solutions, it will accelerate the business opportunity to provide foundational software that can enable businesses to launch, optimise and scale fintech solutions.

“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 and 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”

Today, businesses interested in using Stitch can get started immediately via its self-service portal. 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.
• Verify account information and ownership, to enable faster and more user-friendly digital onboarding, and to perform fraud checks.

“We have been following startups in Africa for many years.” says Ben Stein, co-founder of The Spruce House Partnership. “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.”

The funding comes 12 months since the company emerged from stealth with a $6 million seed round, and will be used to significantly expand the team, launch new product offerings, and enter new markets across the continent.

This caps a bumper launch year that ended with 72 percent month-on-month growth in linked financial accounts in the last quarter.

“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.”

Read more: WEF stresses need for investment in African tech start-ups

Featured image supplied by Stitch