Tiger Global Invests in African Fintech Mono – $15M Series A

Mono Secures $15 Million Series A Funding to Expand Open Finance Access in Africa

Mono, a leading African startup focused on facilitating connections between consumer bank accounts and financial applications, has successfully closed a $15 million Series A funding round. This confirmation was shared with TechCrunch today.

Investment Details and Participants

The funding round was spearheaded by Tiger Global, marking their third significant investment in the African tech landscape this year, following investments in Flutterwave and FairMoney. Additional participation came from new investors including Target Global – previously an investor in the neobank Kuda – General Catalyst, and SBI Investment.

Existing investors also contributed to the round, including Entree Capital, Lateral Capital, Golden Palm Investments, Acuity VC, and Ingressive Capital. This brings Mono’s total funding raised to over $17.5 million since its launch last year.

Addressing Financial Inclusion in Africa

A substantial portion of the African population remains unbanked or underbanked. Open finance companies like Mono, mirroring the success of Plaid in the United States, are capitalizing on the potential of open APIs to enhance access to financial information and reduce barriers to entry for those underserved by traditional banking systems.

The competitive landscape is intensifying, with companies such as Okra, Plaid, Stitch, and OnePipe all working to streamline financial data access through unified APIs. This heightened competition is driving the need for continuous innovation in product development.

Mono’s Key Product Offerings

According to CEO Abdulhamid Hassan, Mono distinguishes itself through two core products. DirectPay enables Nigerian businesses to accept bank transfer payments directly within their web or mobile applications, bypassing the need for debit cards. This aims to replicate the success of companies like Flutterwave and Paystack, but focused on bank account transactions.

Furthermore, Statement Pages allows businesses to access customer financial account data without requiring dedicated developer resources. Hassan describes this as a first-of-its-kind offering within the African market.

Expansion Plans Across the Continent

While initially focused on the Nigerian market, Mono is actively pursuing expansion into other African countries, including Ghana and Kenya, as initially discussed by the CEO in May.

Currently, Mono has launched a pilot program in Ghana, collaborating with banks and fintech companies like Oze and Tranzo. Kenya remains a key target, alongside Egypt and South Africa, for expansion planned for next year.

A potential partnership with Absa bank could accelerate Mono’s entry into the South African market as early as this year, Hassan added.

Beyond Initial Markets: A Pan-African Strategy

Initially, it was believed that open finance startups in Africa would find success by concentrating on individual, large markets. However, companies like Mono, Stitch, Pngme, and Okra are now extending their operations across multiple African nations.

“I believe Nigeria has limitations in terms of the number of businesses we can effectively serve,” stated Hassan during a call with co-founder Prakhar Singh.

Mono anticipates operating in five African countries by the end of next year, a move that suggests an ambitious, though potentially stretched, expansion strategy.

Customer-Driven Expansion and Investor Support

When questioned about the drivers behind this rapid expansion, Hassan emphasized that it is primarily dictated by customer demand. He explained that customers seeking to launch lending or fintech applications in new countries require Mono’s presence to facilitate their operations.

“Our customers have built a strong reliance on our relationship and the products we’ve developed in Nigeria, and they express a desire to launch in new countries alongside us,” Hassan explained.

Diversifying Revenue Streams

Mono is also exploring opportunities to expand its services to non-tech industries, such as FMCGs and law firms, which possess the potential for high transaction volumes. This represents a vertical expansion play for the company.

Key Metrics and Growth

Mono reports having processed over 200 million financial data transactions from more than 270 businesses, developers, and fintechs. The company has also connected over 150,000 bank accounts in the past two months, experiencing a 45x year-on-year growth rate in this area.

With a current team of around 30 employees, Mono has doubled its headcount compared to the previous year, according to its CEO.

The Open Finance Landscape and Acquisition Potential

The global open finance market has seen increased activity, partly influenced by Visa’s unsuccessful attempt to acquire Plaid. Investors are actively backing startups in regions they believe could become attractive acquisition targets for U.S. companies like Visa.

Mono is considered a strong candidate in Africa, and Tiger Global, the lead investor, recognizes this potential. Hassan stated that Tiger Global proactively reached out to lead the new funding round, believing that Mono’s existing capital was insufficient to achieve its full growth potential.

“The Tiger Global team recognized our achievements and expressed a desire to support us in building a truly significant company,” Hassan said.

Rapid Growth and Early-Stage Funding

Mono has demonstrated a remarkable ability to secure early-stage funding. Last September, the company completed a $500,000 pre-seed investment with local investors. It then participated in Y Combinator’s winter batch, raising $2 million in seed funding upon graduation, followed by this Series A round.

Addressing Concerns About Profitability

While rapid growth is often prioritized, concerns have been raised about the sustainability of such models, particularly regarding profitability. In Africa, questions are frequently asked about the long-term viability of high-growth startups like Mono.

Addressing these concerns, Hassan stated, “Our primary focus is on building a successful startup, but I can share that our revenue has increased tenfold since our last funding round in May.”

Mono’s current revenue surpasses its total revenue from the previous three months combined. The CEO emphasized the company’s commitment to pursuing growth, scale, and profitability with a lean team, aiming to establish the leading open banking platform in Africa.