Kenyan fintech startup Wapi Pay has raised $2.2 Million in pre-seed funding to scale up global payments and remittances between Africa and Asia.
The startup, which also has operations in Singapore and and Tianjin in China was founded in 2019 by brothers Paul Ndichu and Eddie Ndichu. It provides a payments gateway for African businesses to receive and send money from Asia via mobile money platforms and bank accounts.
Investors included EchoVC and China based global fund MSA Capital, who have invested in domestic Asian unicorns such as Meituan and NIO, and international unicorns such as Nubank and Klarna. Additional investors include Kepple Africa Ventures and current angel investors Future Hub, Gobi Ventures, and Transsion Holding.
This non-equity pre-seed raise is one of the largest for Fintech in Eastern Africa and Wapi Pay says it will help it engage regulators for licensing across Africa and drive higher and sustained growth.
“These funds will help Wapi Pay diversify our products range and drive growth so that we can evolve remittances into real-time global cross-border payments, starting with Africa and Asia. All while minimising the cost of transactions, it needs to be as easy as sending M-PESA” said Eddie Ndichu, co-founder, Wapi Pay.
Wapi Pay focuses on the Africa-Asia remittance corridor. China-Africa trade jumped 27% to $52.1 billion in the first quarter of this year 2021 compared with 2020, buoyed by the recovery of economies after the coronavirus pandemic.
Today traders have to endure high remittances fees of up to 15% of the amount, waiting period of up to five days, and are exposed the high risk of consistent reversals due to unmatched instructions, with Wapi Pay the cost reduces to below 3% and same day payout.
Sub-Saharan Africa remains the most expensive region to send money to and out, according to the World Bank, with the average cost of sending $200 being 8.02% of the principal amount compared with 4.64% for South Asia, the lowest cost globally.
Seamless payment platforms such as Wapi Pay can greatly ease trade and investments, according to Ndichu.
“Wapi Pay bypasses traditional payment networks, optimizing efficiency and cost for our customers. Users choose the delivery channels they want such as Bank to Bank, Wallet to Wallet, Bank to Wallet and Wallet to Bank options to transfer funds as well as make merchant payments, with settlement done within 24 hours.” he said.
Wapi Pay currently has operations in China, Singapore, Indonesia, Japan, Thailand, Philippines, Malaysia, India, Taiwan, and Vietnam — working with local banks and platforms.
The startup targets to process $500 million in remittances by the end of 2022, grow the number of registered suppliers and beneficiaries in Asia to 100,000; and sign up at least 500,000 merchants, traders, and businesses in Africa.