Anchor raises $2.4 million seed to expand product offerings

Anchor, a leading pan-African Banking-as-a-Service (BaaS) provider, announces its Seed raise of $2.4 million to launch new products, invest in its licensing and compliance infrastructure and evaluate expansion markets.

The round was led by Goat Capital, with participation from FoundersX, Rebel Fund and other world-class investors, including Y Combinator. Byld Ventures, who led the pre-seed, also participated in the seed round.

Launched in August 2022, Anchor simplifies the process of building banking products, shortening it from years to days. In partnership with regulated banking institutions, Anchor’s APIs enable its customers to generate bank accounts, issue cards, make and receive payments seamlessly, and offer savings and investment products.

"We are thrilled to have gathered such strong support from investors who share our vision of expanding access to financial choices through BaaS and embedded finance. This has been a significant journey for the Anchor team after our pre-seed raise last year. We have grown tremendously and increased our impact across various clients and customer segments in Africa,” says Segun Adeyemi, CEO and co-founder of Anchor.

A year ago, the company came out of stealth with a $1 million pre-seed and some early customers. Anchor has now hit over $550 million in annualized total transaction volume (TTV), with revenue growing 30% month-on-month (MoM) and a clientele that includes SeamlessHR, Bujeti, Zit, Penne, and LifeBank. Recently, the company signed a partnership with the fintech arm of Africa’s largest telecom in Nigeria, MTN MoMo PSB, that is set to dwarf its previous growth numbers.

Globally, the embedded finance market is expected to reach $384.8 billion by 2029, with a CAGR of 30%. Africa will account for 10% of this market. The continent is projected to reach $40 billion by 2029, with a similar CAGR of 33.2%. Nigeria, Anchor’s home market, has a TAM of at least $7 billion, signalling a massive growth potential for the seed-stage company.

“It’s no news that companies of all kinds are embedding financial products into their offerings, and we have seen this play out over the last few years in Africa. At Anchor, we are going beyond just offering these banking APIs to our customers. But also empowering them with insights into customer behaviours, preferences, and financial trends that will enable them to serve their customers better,” says CEO Adeyemi. “This funding allows us to build out complementary parts of our core BaaS platform, strengthen our compliance infrastructure and offer other value-added services.”

Regarding their investment in Anchor, Justin Kan, Partner at Goat Capital, says, “The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor growth rate is impressive and showing signs of becoming the category leader which is something we look out for in our portfolio companies. We are excited to partner with Segun and the team to leverage BaaS solutions to create financial prosperity for the continent”.

Anchor's overarching mission is to drive financial access and prosperity by empowering more participants to enter the digital financial services space without the need for costly infrastructure development or regulatory concerns. The funds raised will be allocated towards investing in its licensing and compliance infrastructure, launching its new products, and researching expansion markets.