The Rapid Growth of Fintech in Nigeria and Okra’s $3.5 Million Seed Round

Over the past five years, the fintech sector in Nigeria – and across Africa generally – has experienced remarkable expansion, witnessing a surge in new applications. However, a significant challenge for many of these companies and developers lies in gaining access to real-time banking data.

This lack of access creates obstacles during customer onboarding and verification processes. Consequently, companies resembling Plaid, but with unique approaches, have emerged since 2019 to address these issues.

Okra Secures Seed Funding

Nigeria’s Okra, widely considered the first to achieve significant recognition, has announced the successful completion of a $3.5 million seed funding round.

This investment was spearheaded by U.S.-based Susa Ventures, with participation from TLcom Capital – the sole investor in Okra’s $1 million pre-seed round in 2020 – Accenture Ventures, and several angel investors.

In total, Okra has now raised $4.5 million across two funding rounds. The company intends to utilize these funds to enhance its data infrastructure throughout Nigeria.

Okra’s Role as an API “Super-Connector”

Okra positions itself as an API “super-connector,” establishing a secure platform and streamlined process for exchanging real-time financial information between customers, applications, and banks.

Founded in June 2019 by Fara Ashiru Jituboh and David Peterside, Okra launched in January 2020 and has rapidly expanded its connectivity to all banks in Nigeria. The company boasts a claimed 99.9% uptime guarantee.

Business Model and Partnerships

Okra’s business model centers around providing integrations to developers and businesses, connecting them to existing banking services and earning commissions on subsequent transactions.

These integrations encompass account authorization, balance inquiries, identity verification, income assessment, payments, and transaction history. The company currently partners with over 100 developers and businesses, including prominent names like Access Bank, Aella, Interswitch, and uLesson.

Focus on Digital Transformation

Ashiru Jituboh emphasizes that Okra’s core business extends beyond simply providing APIs; it’s about delivering “digital-first experiences and transformation.”

“We are building an open finance infrastructure that empowers developers and businesses to offer innovative digital financial products,” she stated. “Businesses are increasingly recognizing the importance of digital transformation, and we are providing the tools and services needed to achieve this at scale through our APIs.”

Impressive Growth Metrics

This strategic positioning appears to be driving Okra’s substantial growth. The company reports an average month-on-month API call growth rate of 281%.

Okra has also processed over 20 million transactions, with 27.5% of this volume – exceeding 5.5 million transaction lines – occurring last month. For comparison, Plaid has analyzed over 10 billion transactions in its eight years of operation.

“This is a strong indicator that we are on the right path in terms of traction,” added COO Peterside.

Navigating Regulatory Scrutiny and Future Expansion

The Nigerian fintech ecosystem has demonstrated that rapid growth often attracts increased regulatory attention. Over the past year, financial regulators have implemented measures targeting payments, cryptocurrency, and wealth tech startups.

While regulators claim to prioritize the interests of the Nigerian public and consumer protection, some perceive these actions as stifling innovation and asserting jurisdictional control.

Proactive Engagement with Regulators

Currently, regulators do not appear to be focusing on API fintech infrastructure startups. However, Okra is proactively preparing for potential changes by engaging with regulators in its sector.

Drawing parallels to the EU’s General Data Protection Regulation (GDPR) and its influence on data protection laws in African countries, including Nigeria’s Nigeria Data Protection Regulation (NDPR), Peterside believes Okra is well-positioned to comply with existing regulations.

“The legal framework is clear, both in Nigeria and globally, and our business operations are aligned accordingly,” he explained. “However, we cannot predict regulatory decisions, but the existing laws and global standards provide a solid foundation.”

Addressing Talent Acquisition Challenges

If Okra can successfully navigate the regulatory landscape, its growth potential remains significant. However, CEO Ashiru Jituboh identifies talent acquisition as a key challenge.

“The biggest challenge we face is hiring,” she stated.

Prioritizing Speed and Customer Support

Okra’s ability to onboard new clients quickly – within 24 hours – and provide tailored support is a significant factor in its appeal.

The company intends to allocate a substantial portion of the new funding to talent acquisition, ensuring it can maintain its rapid growth and effectively address customer needs.

“We want to ensure we’re solving our customers’ problems as quickly as possible and providing the support they need. Being able to raise capital helps us attract great talent and build a strong team,” she added.

A Strong Founding Team and Investor Base

Ashiru Jituboh’s engineering background and experience at JP Morgan, Fidelity Investments, and Daimler Mercedes Benz are crucial to Okra’s success. She serves as both CEO and CTO, establishing herself as a prominent founder in Africa’s fintech industry.

Omobola Johnson, a senior partner at TLcom Capital, highlights these qualities and Okra’s compelling proposition as the reasons for the firm’s initial investment and continued support.

Okra’s investor list has become increasingly impressive over the past year. Susa Ventures, the lead investor, has a track record of successful early investments in companies like Robinhood, Flexport, and Fast. Okra is the only African-based startup in Susa’s portfolio besides Andela.

“We’re thrilled to partner with Okra as they empower developers across the African continent to transform digital financial services,” said Seth Berman, general partner at Susa Ventures. “We’re impressed by the quality of Okra’s team, the speed of their development, and the enthusiasm from customers building on their API.”

Accenture Ventures’ Investment and Pan-African Expansion

Accenture Ventures, a Fortune Global 500 company, has invested in over 30 startups, and Okra represents its first investment in a Black-founded startup.

Tom Lounibos, president and managing director of Accenture Ventures, explained that the investment stems from a desire to partner with Okra in bringing open finance to Africa, recognizing the founders’ caliber and the strength of their technology.

The founders believe that Accenture and Susa represent “smart money” investors who align with Okra’s vision and technology infrastructure focus.

“If we’re building an API infrastructure for the continent, we thought Accenture would be a valuable partner because we’re essentially building an API, which is a technology-based infrastructure,” said the CEO.

These investors will be instrumental in supporting Okra’s hiring efforts and its planned expansion into Kenya and South Africa, where the company is currently in beta testing.

Accenture’s investment aligns with a broader trend of major companies entering the African fintech market, exemplified by Stripe’s acquisition of Paystack and Visa and WorldPay’s partnership with Flutterwave.

A Growing Ecosystem

Accenture Ventures’ investment also represents a continuation of the trend of U.S. investors entering the African fintech space, following investments from Bezos Expeditions in Chipper, Tiger Global and Avenir Growth Capital in Flutterwave, and Valar in Kuda.

In addition to Susa and Accenture Ventures, Okra also secured funding from three angel investors: Rob Solomon, chairman at GoFundMe and former partner at Accel, and two former founding engineers at Robinhood – Arpan Shah and Hongxia Zhong.

Okra is not alone in pursuing opportunities in the API financial infrastructure space. Stitch, a South African API fintech, recently emerged from stealth with $4 million in funding. Pngme raised $3 million in February, while Nigerian companies Mono and OnePipe have secured six-figure pre-seed rounds and are backed by Y Combinator and Techstars.

Despite the increasing competition, the infrastructure business offers ample opportunities for multiple successful companies.