Verto Raises $10M for Emerging Market Payments

Verto Secures $10 Million in Series A Funding to Expand Global B2B Payments

Verto, a global platform facilitating B2B payments for small and medium-sized enterprises (SMEs), has announced the successful completion of a $10 million Series A funding round.

Investment Details

Quona Capital, a venture capital firm specializing in fintech, spearheaded the investment. Additional participation came from firms including Treasury, MEVP, TMT Investments, Unicorn Growth Capital, Zrosk Investment Management, and P1 Ventures.

Addressing Currency Interoperability in Africa

The limited compatibility between African currencies often necessitates the use of the U.S. dollar for cross-border transactions. For example, a business in Kenya paying a South African counterpart frequently relies on the dollar, which dominates approximately 80% of Africa’s bilateral trade.

As global trade networks become more interconnected, international payments present ongoing challenges, particularly in emerging markets where local currencies lack the liquidity found in developed economies.

The Gap in the B2B Market

While numerous fintech solutions focus on peer-to-peer and remittance payments, the B2B sector – representing 30% of global imports and 45% of employment in emerging markets – remains largely underserved.

This realization prompted Ola Oyetayo and Anthony Oduwole to establish Verto in 2018, adopting an emerging markets-focused strategy rather than solely concentrating on Africa.

Verto’s Evolution and Growth

Initially, Verto functioned as a currency exchange marketplace, assisting businesses in converting illiquid currencies into more readily tradable pairs.

Following a $2 million seed funding round, user feedback underscored the critical need for comprehensive cross-border payment capabilities.

The platform’s development naturally progressed from currency exchange to a complete suite of cross-border payment solutions for businesses, as stated by Oyetayo.

Expanded Capabilities and Reach

Currently, the Verto platform supports transactions in over 200 countries and 39 currencies, a significant increase from the previous 120 countries and 19 currencies.

Verto caters to freelancers, SMEs, and large corporations, offering payment solutions, currency exchange services, and multi-currency accounts tailored to each segment.

Businesses utilizing Verto can execute cross-border B2B payments at FX rates up to nine times more favorable than traditional banks, and without incurring any fees, according to CEO Oyetayo.

User Base and Transaction Volume

This no-fee structure has resonated with a growing user base of over 2,000 businesses, each averaging $30,000 in transaction volume.

The company reports facilitating billions of dollars in transactions annually.

Since the onset of the pandemic, Verto has experienced an 11-fold increase in user growth and an 8-fold rise in revenue, though specific figures remain undisclosed.

Benefiting from Digital Payment Trends

Like many fintech companies, Verto has benefited from the global shift towards digital payment methods and the increasing prevalence of digital transactions among businesses within Africa.

Businesses can leverage Verto’s infrastructure to develop payment solutions for their own clients. For example, an investment platform can utilize Verto to manage currency conversions and facilitate pay-ins and payouts.

Oduwole explained that this solution addresses the challenges of slow payment processing in developing markets, offering instant or near-instant settlement through Verto’s compliance infrastructure.

Verto’s Revenue Model

While cross-border payments are offered without fees, Verto generates revenue through a small commission on currency exchange services and a 1% commission on its price discovery marketplace solution.

The CEO anticipates future revenue streams from API calls and transaction fees on the platform.

Investor Confidence and Future Plans

Monica Brand Engel, co-founder and managing partner at Quona Capital, praised Verto’s ability to address the challenges of visibility, speed, and cost associated with cross-border payments.

Verto is expected to expand its currency offerings to 51 by the end of the year, according to CTO Oduwole. The investment will support this expansion and further development of the platform.

Geographical Expansion and Financial Inclusion

Currently, Verto supports only six African currencies, representing 60% of the continent’s GDP.

With the global B2B payments industry projected to reach nearly $200 trillion by 2028, Verto intends to accelerate its expansion into additional markets in Africa and the Middle East.

The founders envision a future where exchanging currencies like the Ghanian cedi and the South African rand is seamless, without the need for dollar or euro conversions.

Verto aims to promote financial inclusion by enabling businesses in underserved regions to participate in global trade on an equal footing with their counterparts in developed markets.

“Ultimately, we want to help a business in an emerging market send money to another business elsewhere, as easily as sending a text message,” the founders concluded.