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OnePipe to expand beyond Nigeria after $3.5 million seed round

OnePipe, a fintech API company raises $3.5 million seed to double down on its embedded finance offering

Three years after making its debut in Nigeria's tech space, OnePipe closes a $3.5 million Series A round. The latest round brings the total investment in the startup to $4.4 million courtesy of a $950,000 pre seed round.

The seed round was led by Atlantica Ventures, Tribe Capital and V&R associates. Canaan Partners, Saison Capital, Norrsken, The Fund and Two Culture Cap also participated in the round. Further contributors were Chris Adelsbach, Techstars, Ingressive Capital, Acquity, P1, Raba and DFS Lab alongside a few angel investors.

In our view, Aniko Szigetvari, the founding partner at Atlantica Ventures, said "embedded finance is the next enabler for both traditional and financial service businesses to increase customer loyalty and revenue by offering a wide range of third-party financial products and revenue streams for their customers,”

Founded in 2018 by Ope Adeoye, the API fintech has evolved overtime. OnePipe first started as an API platform for open banking but it has since dive into the realm of embedded finance owing to poor traction from its initial business model (open banking).

Adeoye said, “The caveat goes like this, the moment you make a positioning play for banking as a service, all you really need is one partner bank that lets you go deep because the embedded finance [offering] is about depth and not breadth."

“If you go for data aggregation or open banking in general, then you are going for breadth, not depth. So on our side, we said we’d rather go with tier two and tier three bands, where once you describe the concept to them, they get it. It powers their growth and is more valuable to them, unlike other larger financial institutions,” he added.

OnePipe made the right move by changing its business model. According to TechCrunch, "In the 10 months OnePipe switched up to this model, it has processed more than 6.3 million transactions worth over $46.3 million, the company said. These numbers are from over 1 million individual accounts and 138+ businesses, ranging from FMCG and retail to lending and agriculture."

The startup generates revenue by taking a percentage cut from transactions made on these accounts which it shares with its partner banks. For loans offered via its APIs, OnePipe takes at least 1% of the loan interest from its lending partners and also shares it with the businesses and partner banks.

The next move for OnePipe would be to expand into other countries. The company's CEO revealed that in a statement. “We made sure that before we looked into other African countries, we were going in with a customer on the ground already,” said the CEO. “We did a deal with Sendy that made them participate in this round, and we will then deploy the capital for expansion. So as they go to Egypt, South Africa, we’ll be deploying with them and grow together.”

Nigeria in focus

GDP: $432.294 billion in 2020 compared to $448.12 billion in 2019

Population: 206,139,587 in 2020 compared to 200,963,03 in 2019

GDP per capita: $2,097 in 2020 compared to $2,229 in 2019