Nigeria's Gray Raises $2M for Cross-Border Payments Play and Regional Expansion - TechCrunch

Providing virtual foreign bank accounts has become a common strategy for fintech companies to enable Nigerians and Africans to facilitate international transfers. In the latest development, Greyfintech company in this category, which provides virtual international bank accounts to African freelancers and remote workers, announces that it has raised $2 million in seed funding.

Idorenin Obong and Femi Ahedo founded Gray in July 2020 as an instant exchange service to help Nigerians exchange foreign currencies in their local account for the local currency, the Naira. Last year, the startup raised an undisclosed pre-launch investment and was accepted into YC’s winter batch this March.

The Powered by YC Since then, Nigerian fintech has expanded into East Africa, starting with Kenya. CEO Obong told TechCrunch that partnerships with two companies in Kenya: payments giant Cellulant and tech startup Moringa accompanied the move.

“We chose Cellulant to power our Kenya Shilling payment infrastructure,” said the CEO. “Moringa is like an avenue and channel for training new tech talent, so it made sense to have a partnership like this as we try to build this for freelancers.”

Thus, users in Nigeria and Kenya can receive foreign payments from over 88 countries using USD, GBP and EUR bank accounts created on the platform, convert them into their local currencies (Naira and Shilling) and withdraw directly to your mobile money or local bank account. They can also send money to the UK and Europe on the platform. Gray has also enhanced its functionality to support payouts in another East African currency: Ugandan shillings, bringing the total number of supported currencies to six. Although it is yet to launch in the country, Obong said Uganda is in Gray’s regional purview, as is fellow East African country Tanzania; fintech will expand into the latter within a month, he added.

Gray claims to have about 100,000 individual users, and since the beginning of the year, transaction volumes have increased by 200%. COO Agedo said the company is privately launching a business-focused product, Gray Business, to complement this consumer-facing growth and expand its product beyond money transfers and person-to-person payments.

The lack of interoperability between African currencies is one of the reasons businesses on the continent use the dollar to pay each other instead of local currencies. Platforms like Verto, a global B2B payments platform that enables African businesses to make international payments through multi-currency wallets, addresses this issue. With its Gray Business product, the year-old fintech intends to enter the market and provide a cheaper option to send and receive local currencies within the continent, especially for micro and small businesses.

Gray Business has been in private beta for the past two months and the seed investment will help take it public in Nigeria and Kenya. Investors in the round include venture firms such as Y Combinator, Soma Capital, Heirloom Fund and True Culture Fund and angels such as Alan Rutledge, Samvit Ramadurgam and Karthik Ramakrishnan. Startups offering similar services include Techstars-backed PayDay.

“Grey was founded to enable people to live a location-independent lifestyle. “I believe the least of your worries as a freelancer, telecommuter or digital nomad should be sending or receiving payments, so we’ve made it easy,” CEO Obong said. “We like to say that we’re on a mission to make international payments as easy as sending an email. We want to do impactful work to improve the way Africa as a continent interacts with money across its borders.”

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