Mono, an African business that connects people’s bank accounts to financial apps, has raised a $15 million Series A investment, according to the company’s announcement.
The round, which was led by Tiger Global and included new investors Target Global (an investor in neobank Kuda), General Catalyst, and SBI Investment, was the VC firm’s third large investment in Africa this year following Flutterwave and FairMoney.
Entree Capital, Lateral Capital, GPIC, Acuity VC, and Ingressive Capital were among the new investors, bringing Mono’s total raise to just over $17 million since its inception last year.
More than half of the population is either unbanked or has limited access to financial services. Mono, an open finance player in Africa, relies on the idea that access to a financial ecosystem via open APIs will enhance access to financial information and cut entry costs for the underbanked, mimicking Plaid’s success in the US market.
With firms like Okra, Plaid, Stitch, and OnePipe combining multiple financial data into unified APIs, the fight to deliver consumers’ financial data to businesses and third-party developers is heating up, necessitating the release of more new solutions down the road.
According to Mono’s CEO Abdulhamid Hassan, two products provide the company an advantage. First, there’s DirectPay, a service that allows Nigerian businesses to accept bank transfer payments from customers through their website or mobile app without requiring them to use their debit cards. Consider what Flutterwave and Paystack have accomplished with cards, and what Mono hopes to achieve with bank accounts.
Next, Hassan describes Statement Pages as the first of its kind in Africa, allowing businesses to access clients’ financial accounts without the need for a developer.
Despite these new features suited to a Nigerian population, Mono is eyeing other countries such as Ghana and Kenya, which the CEO originally announced in May.
Mono has so far only delivered in Ghana, piloting with a few banks and fintechs like Oze and Tranzo. Kenya, on the other hand, is still on Mono’s radar as one of three countries it aims to expand into next year (together with Egypt and South Africa).
Mono may complete its move to South Africa this year through a cooperation with Absa bank, according to Hassan.
When open finance companies in Africa first gained traction last year, the general belief was that each company could do considerable business in the large individual areas in which they had initially established. However, it does not appear to be the case anymore, as Mono, Stitch, Pngme, and Okra are now present in other African markets.
Mono will be present in five African countries by the end of next year, raising the possibility that the corporation is spreading itself too thin.
Startups nowadays spend a lot of money to scale quickly yet have little or no income to show for it. In Africa, aside remarks about how such approaches can lead to long-term unprofitability for high-flying startups like Mono are frequently made.
Mono’s current revenue is equal to the business’s total revenue over the previous three months, according to the CEO, who also mentioned how the company is seeking growth, size, and profitability with a small staff in order to “build the best open banking platform in Africa.”