Anchor, a Nigerian banking-as-a-service (BaaS) provider, has successfully raised $2.4 million in seed investment, spearheaded by Justin Kan’s Goat Capital. This funding round also witnessed participation from FoundersX, Rebel Fund, and existing investors such as Y Combinator and Byld Ventures.

Just over a year ago, Anchor emerged from stealth mode with over $1 million in pre-seed funding. Their core mission is clear: to offer APIs, dashboards, and developer tools that empower the integration and development of banking solutions. In a competitive Nigerian fintech landscape featuring players like JUMO, Maplerad, OnePipe, and Bloc, Anchor has carved a niche for itself as a banking-as-a-service provider.

Traditional banks have often lagged in adapting to the rapidly evolving digital banking landscape. Consequently, platforms like Anchor have become popular among neobanks and businesses seeking to seamlessly embed financial services into their products. Today, these banking-as-a-service platforms are seizing the opportunity to offer more personalized, cost-effective, and flexible services, facilitating everything from bank accounts and payments to savings and cards.

Anchor distinguishes itself by partnering with regulated banking institutions. Through this approach, they claim to streamline the process of developing banking products from years to mere days. Initially catering exclusively to customer accounts, Anchor’s APIs now support a broader range of services, including business accounts, card issuance, bill payments, bulk disbursements, cross-border payments, and developer-specific features like an audit log system and developer webhooks.

Anchor’s CEO, Segun Adeyemi, emphasized their comprehensive offerings, stating, “If you look at the scope of product today, even though there were a few other players that have been in the market before us, there is no one that has the scope of offering that we have in the market today.”

Scaling Success: Serving Over Five Dozen Customers

Anchor commenced operations in August of the previous year with around 30 clients at various onboarding stages. Today, they serve approximately 270 clients, with about 63 actively transacting on the platform. Their clientele spans fintechs, SaaS companies, e-commerce enterprises, marketplaces, and other tech-driven businesses, including names like Bujeti, Pennee, SeamlessHR, LifeBank, Waza, and

The Y Combinator-backed fintech claims to have facilitated over $550 million in annualized total transaction volume (TTV) by enabling fintech services for these enterprises. Their revenue is on an impressive growth trajectory, increasing by 30% month-on-month. This revenue comes from processing fees, account and card issuance fees, and interest income generated on the float.

Financial Inclusion and Focused Growth

Online onboarding of non-digital native firms plays a crucial role in increasing financial inclusion. Anchor initially aimed to encourage embedded financing for large supermarkets and multinationals in Nigeria. However, they realized that these entities were not yet digitally ready. Recognizing the urgency, Anchor shifted its focus to digitally ready and tech-enabled businesses.

Segun Adeyemi noted, “We realized they weren’t digitally ready yet… As a startup, we had to realize we didn’t have the luxury of waiting for customers. So, we had to change and hyper-focus on digitally ready and tech-enabled businesses.”

With one year of operation under its belt, Anchor has learned valuable lessons, including pricing strategies, revenue source development, and compliance process enhancement. In light of this recent funding, Anchor plans to double down on these areas, striving to improve its end-to-end compliance system, invest in value-added products like its ledger system, and onboard more customers.

Tapping into a Growing Market

The global embedded finance market is projected to reach $384.8 billion by 2029, with Africa contributing 10% to this industry. Anchor is strategically positioned to capture a share of this market, with a $7 billion addressable market in Nigeria alone.

In addition to their current growth trajectory, Anchor has solidified a partnership with the fintech arm of Nigeria’s largest telecom company, MTN. This collaboration opens up new growth avenues for the platform. Furthermore, Anchor is in preliminary discussions regarding potential pan-African expansion.

Justin Kan, partner at Goat Capital, expressed enthusiasm for Anchor’s growth potential, saying, “The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and showing signs of becoming the category leader, which is something we look out for in our portfolio companies.”

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By 4niso

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