Wapi Pay, a Kenyan startup with offices in China and Singapore, has announced it has secured $2.2m from a host of investors to continue to facilitate cross-border payments between Africa and Asia.
MSA Capital, a China-based fund that has invested in unicorns Meituan, Nubank, and Klarna, participated in the round, which is one of the largest of its kind in East Africa and the continent. Pan-African and Africa-focused firms EchoVC, Kepple Africa, and Future Hub, as well as Pan-Asian firms Transsion Holdings and Gobi Ventures, also invested in this round.
Read also: South African Agritech Startup, Khula, launches app after securing $1.3mn funding round
“We started Wapi Pay having seen how fragmented the payment infrastructure is and how horrifying the experience and expense of making or receiving a payment to and from Asia,” Paul Ndichu said in a statement.
“We spent some time in Asia, given the growing trade relationship between the two corridors [Africa and Asia], and saw the growing need to make this more efficient, faster, and cheaper, evolving from remittances to global payments. These transactions are already complex in nature; how do we make them as simple and easy as mobile money?” He added.
Wapi Pay plans to use the funds to engage regulators in Africa for licensing, as well as scalability, product, and regional expansion. It also intends to use the funds to diversify its products range and drive growth so that it can evolve remittances into real-time global cross-border payments, starting with Africa and Asia.
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“Africa to Asia is a large trading corridor overlooked and underserved by tech today. We believe Wapi Pay is the best team to build the necessary infrastructure to support its growing trade volumes. We are excited to support them with our extensive China fintech network and playbook,” Tim Chen, vice president at MSA Capital, said in a statement.
In the first quarter of 2021, trade between Africa and China increased by 27% to $52.1 billion, compared to the same period in 2020. Despite the pandemic’s economic recovery, African merchants still find it difficult to send and receive money. These expenditures might be as high as 20% in some circumstances, particularly in Southern African countries. The wait period can be excruciating, with some customers waiting up to a week for payment to be completed. Wapi Pay claims to be able to process payments in as little as a day and charges as little as 3%, an attractive value proposition for investors in this round.
Founded in 2011, Beijing, China-based MSA Capital is a global venture capital firm with $1.5 billion under management, investing from seed to growth.
What You Need To Know About Wapi Pay
Founded in 2019 by brothers Paul Ndichu and Eddie Ndichu, Wapi Pay is a payment gateway that allows African companies to receive and send money from Asia via mobile money networks and bank accounts.
The flow of money into Africa for subsistence has received the majority of the attention when it comes to remittance. As a result, rather than establishing new infrastructure and payment processing models for African consumers and enterprises to make cross-border payments, digitization has primarily focused on delivery.
To provide service to their consumers, financial institutions must rely on old systems and correspondence methods. Given the compliance requirements, these transactions are inherently complex. They become even more opaque, take longer to process, and are far too expensive due to a lack of new infrastructure or processes. Crypto remittance firms claim to be able to tackle this challenge, but none have been able to expand to a useful level.
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