Anchor, a Nigerian banking-as-a-service (BaaS) provider, has raised $2.4 million in seed funding. Justin Kan's Goat Capital led the funding round, with participation from FoundersX, Rebel Fund, and existing investors like Y Combinator and Byld Ventures. Anchor came out of stealth mode a year ago with over $1 million in initial funding. Its main goal is to offer APIs, dashboards, and tools to help developers integrate and build banking solutions.
Anchor faces competition in the crowded Nigerian fintech market, going up against other BaaS providers like JUMO, Maplerad, OnePipe, and Bloc. These platforms are popular with neobanks and businesses looking to incorporate financial services into their products because traditional banks have been slow to adapt to digital banking changes.
Anchor sets itself apart by partnering with regulated banks, which allows it to speed up the process of creating banking products from year to day. Initially focused on customer accounts, Anchor's APIs now support a wider 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.
Since its launch in August of the previous year, Anchor has onboarded around 270 clients, with approximately 63 actively using the platform for transactions. Its clients include fintechs, SaaS companies, e-commerce businesses, and other tech-enabled enterprises. Notable clients include Bujeti, Pennee, SeamlessHR, LifeBank, Waza, and Zit.ng. The fintech claims to have facilitated over $550 million in annual transaction volume (TTV) and is experiencing 30% monthly revenue growth.
Anchor initially aimed to promote embedded financing for large Nigerian supermarkets and multinationals but shifted focus to digitally-ready and tech-enabled businesses when they realized many potential clients weren't prepared for digital integration. In the future, Anchor plans to improve compliance processes, develop value-added products like its ledger system, and expand its customer base.
The global embedded finance market is expected to reach $384.8 billion by 2029, with Africa contributing 10% to this industry. Anchor believes it has a $7 billion addressable market in Nigeria and has recently partnered with MTN, Nigeria's largest telecom company. The startup is also exploring opportunities for pan-African expansion, supported by its impressive growth rate in the African embedded finance market. Justin Kan's Goat Capital is optimistic about Anchor's potential to become a category leader in this space.
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