Mono: Y Combinator Backs African Plaid Competitor

The Genesis of Mono: Building a Financial Data Network for Africa

Prakhar Singh and Abdul Hassan, having collaborated for seven years, possess a shared history of developing various technological solutions both independently and as a team.

Prior to his tenure at Paystack beginning in 2018, Hassan was a co-founder of the payments startup, OyaPay, established in the preceding year. Following his departure from the Stripe-acquired firm in 2019, he initiated Voyance, a data-focused venture. Singh, who had previously successfully exited Transferpay.ng – an offline payments platform – joined Voyance as a software engineer.

Launching Mono and its Core Functionality

In June of the previous year, the pair commenced work on Mono, a project designed to enable businesses to securely access their customers’ financial account information within Nigeria.

By consolidating diverse data points into a unified API, companies and developers can efficiently retrieve crucial details such as account statements, current balances, transaction history, income levels, expenditure patterns, and account holder verification. User consent is paramount; individuals must authenticate using their existing online or mobile banking credentials before any data access occurs.

After extensive testing and refinement, Mono’s beta version was released in August, with Hassan assuming the role of CEO and Singh serving as CTO. Subsequently, in September, the startup secured $500,000 in pre-seed funding from investors including Lateral Capital, Ventures Platform, Golden Palm Investments, and Rally Cap. This funding round was notable for its swift completion following the platform’s launch, a characteristic shared by other API fintech companies in the region.

Addressing Financial Inclusion in Africa

In a region where over half the population is unbanked or underbanked, companies like Mono are striving to enhance financial inclusion across the continent.

Open finance operates on the principle that increased access to financial ecosystems through open APIs, streamlined money transfer methods, and improved access to financial information and credit decisions can lower the barriers and costs for those currently excluded from traditional banking systems.

Mono’s Vision: Beyond Open Banking

Hassan positions Mono’s strategy as encompassing both open finance and open banking. While acknowledging the shared goals of these approaches, he believes they are ultimately subject to governmental and financial regulatory oversight. He defines Mono as a data company operating within the fintech landscape.

He draws a parallel between Mono and the early stages of Google, which began with the ambition of organizing global information and making it universally accessible. Google subsequently evolved into a multifaceted internet leader.

“We don’t strictly define ourselves within open banking or finance,” Hassan explained to TechCrunch. “Our current focus is on aggregating data from various sources into a secure database, providing businesses with access – with explicit user consent. In the future, we envision leveraging this data for diverse applications and problem-solving.”

Current Traction and Partnerships

Mono has established partnerships with over 16 financial institutions in Nigeria and currently serves more than 100 businesses, including Carbon, Renmoney, Flutterwave, and Indicina. The CEO reports processing approximately 5 million data sets each hour.

The majority of these clients are lending companies, with a growing number in the proptech and health tech sectors, offering installment payment options. Plans are underway to broaden the client base, including enhancing application onboarding through a one-click signup feature.

Simplifying User Onboarding with One-Click Signup

Consider a scenario involving two savings applications. A user initially submits their KYC (Know Your Customer) information to the first app. However, they may choose to switch to a second app due to factors like more favorable interest rates.

Typically, this transition requires repeating the KYC process. Mono’s one-click signup feature streamlines this by allowing users to seamlessly transfer their data from the first app to the second, eliminating the need for redundant verification. Mono has partnered with two prominent Nigerian savings and investment platforms to implement this service.

“We initially focused on providing companies with the infrastructure to access customer financial accounts and assess their history for loan approvals or other financial services,” Hassan stated. “Now, we aim to empower the next generation of African companies with streamlined onboarding processes.”

Y Combinator Acceptance and Future Growth

Mono’s promising features and rapid growth have attracted significant investor attention. The six-month-old startup recently announced its acceptance into Y Combinator’s Winter 2021 batch, receiving $125,000 in seed funding and the potential for further investment upon graduation in March. Mono is among 39 African startups to have participated in the Y Combinator accelerator since 2009.

This acceptance addresses a key challenge for Mono: building trust with users hesitant to share their online banking details due to concerns about online fraud. Hassan believes Y Combinator’s endorsement, coupled with a targeted offline marketing strategy, will enhance Mono’s credibility.

Lessons from Paystack and Expansion Plans

Hassan’s experience as a product manager at Paystack, prior to its acquisition by Stripe, provided valuable insights into product development, management, and talent acquisition – lessons he has applied to Mono, which now employs 13 individuals across Nigeria and India.

Mono’s ambition is to become a global company, and Y Combinator provides a platform to facilitate this expansion. The company is actively planning a pan-African rollout to Ghana and Kenya, with potential execution within the first quarter of the year. Securing additional capital through a seed round will be crucial to support this expansion and associated hiring initiatives.