Nigerian Digital Bank Yep! raises $1.5 million pre-seed for its ‘super financial app’ game – TechCrunch


Agency banking is big business in Nigeria and Sub-Saharan Africa. It involves agents or merchants, who act as human ATMs, offering financial services such as transfers, savings and payments to underbanked and unbanked people who rarely visit bank branches.

Banks and telecom operators are important players, as are some companies like E-Settlement, a holding company for different financial entities. Founded by Olaoluwa Awojoodu, the company’s banking agent platform, PayCentre Africa, has a presence in Nigeria, Niger, Burkina Faso, Ivory Coast and Togo.

Last year, the company said more than 5 million customers transacted more than $2 billion with its network of 100,000 merchants. With this firepower at his disposal, Awojoodu has teamed up with Airende Ojeomogha and Garry Ottosen to launch Yep!, a neobank that will leverage E-Settlement’s network and convert these underbanked customers online as well as target those Already online.

Today, Yep!, a “super financial app” with payment, funds transfer and banking features, announces that it has raised $1.5 million in a pre-seed round led by the pan-African VC Greenhouse Capital. The startup plans to go live in the five markets where E-Settlement operates, serving digital financial services for consumers, small business owners and merchants.

“We want to bank guys from Lagos as well as guys from a village in Ikot Ekpene. And at the same time, not just Nigeria, we are also looking at a full African game, co-founder and CEO Awojoodu told TechCrunch on a call.

“So it’s really this financial access for Africans, not just guys who are digitally enabled, but even guys who are off digital channels, we’re going to bring everybody into the digital environment using both digital tools and agent networks.”

In Nigeria, more than 42 million adults who live in rural areas lack basic banking services. Bank branches do a great job of fostering financial inclusion, but at some point the underserved need to be integrated into a comprehensive digital ecosystem that provides access to all financial services.

The founders built the solution of Yep! in this spirit. Their first step was to acquire a microfinance license, a prerequisite for any fintech that wants to hold consumers’ money; in Yep!’s case, both agent money and consumer money (which it couldn’t accomplish with E-Settlement). So, these agents can now offer deposits, withdrawals, digital accounts, issuing cash, and paying bills.

“We can now start banking consumers, because we now own their money, and we can also bank our agents. So we kind of shut down the whole ecosystem, bringing together agents and merchants, businesses and consumers into one ecosystem,” Ojeomogha said on the call.

The San Francisco and Lagos-based startup will also cater to customers who use banks and other digital-only platforms like Kuda, Carbon and FairMoney. It will be to provide account opening, debit card issuance, bill payment, credit financing services to such online consumers and financial management services to consumers and businesses.

But yes !The offline and online acquisition strategy is not really new. OPay, known for providing financial services to underbanked customers, successfully launched its digital banking arm in 2021 after converting millions of users through a range of vertical services. TeamApt also teased a digital banking game for the underbanked last year; however, nothing concrete has yet surfaced.

What gives Yep! a benefit, according to its founders, is superior experience in raising debt capital for lending – a practice where agency banking providers provide working capital to their agents who, in turn, lend to their end consumers. Ojeomogha and Ottosen will be key to that.

Ojeomogha has experience as an investment banker and previously worked for fintechs like Oxygen and Tally in the US. Ottosen, on the other hand, has set up loan programs, including personal and business credit cards and small business installment loans for several US banks.

“We have offered loans to agents in the past and have had low single digit default rates. We’ve taken a different approach to some of these things in a more strategic way. Gary and I have raised hundreds of millions in debt, so access to credit facilities is a plus for us, including the fact that we can raise those facilities fairly quickly,” said co-founder Ojeomogha.

“Another competitive advantage we have is that we have a ton of data,” added co-founder and board member Ottosen. “And I think one of the reasons I was excited to come here is that I spent years building types of credit models and helped build a few banks. We have a roadmap to start lending to our agents and as this is a digital bank we will be able to penetrate deep into both Nigeria and Francophone Africa.


Yeah! founders, LR: Airende Ojeomogha, Olaoluwa Awojoodu and Garry Ottosen.

The company currently has a $500,000 credit facility to initiate working capital loans to its existing merchants. The founders say they are in talks with international credit providers to increase that amount to $10 million by the end of 2022.

To further distinguish itself from similar platforms and materialize its super app plans, Yep! testing money transfer products. Sub-Saharan Africa remains the most expensive region to send money, with remittances reaching $45 billion. Yeah! sees an opportunity to build on remittance flows where agents act as intermediaries to receive money from the diaspora and distribute it to those on the continent. More on the diaspora game, the startup also plans to offer checking and savings accounts, credit card and physical banking for African migrants.

But all of that is in the Yep! pipeline. For now yes ! intends to use the pre-seed investment to double its agent network to over 200,000 by the end of 2022 as part of its goal to drive financial inclusion. The funding also provides ammunition to launch its digital banking services in Nigeria and the other four countries, which the founders say is ripe for the taking as there is less competition compared to Africa’s most important fintech market.

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