A Nigerian Y Combinator-backed agency banking company, CrowdForce, has announced it closed a $3.6 million pre series-A investment, which would be used to increase its agent network.
According to a statement signed by the company, access to financial services in Nigeria remains a challenge.
There are 4.8 bank branches and 19 ATMs per 100,000 adults, compared to the world average of 13 bank branches and 40 ATMs. Less than 1/3 of Nigerian adults have access to a bank branch or ATM within one kilometer of where they live. Unreliable infrastructure also undermines trust in the banking system – roughly 15 per cent of card transactions fail on a POS. According to EFINA, 63.2m of 99.6m adults in Nigeria are financially included.
Over the last three years, CrowdForce has partnered with cash-heavy small businesses, converting them to mobile bank branches while safely storing their cash on a PayForce digital wallet. The Company has partnered with 19,000 fuel stations, 20,0000 resellers, and 6,000 pharmacies to broaden its distribution network. CrowdForce aims to bring financial services within one kilometer, or within 15 minutes, of all Nigerians.
The round, split between equity and debt, was led by Aruwa Capital Management with participation from HAVAÍC and AAIC. CrowdForce has the largest liquidity among Nigerian agent banking networks, leveraging over 1.7Trillion Naira via its partners.
CrowdForce will use the capital to expand its team, geographical operations and marketing to increase its agent network. CrowdForce aims to grow its 7,000 active agents three-fold this year. The Company will distribute more point of sale (PoS) terminals to small businesses; gas stations, pharmacies, and aggregators/resellers, which act as mobile bank branches. CrowdForce has been cash positive since 2020 and served 1.9m unique customers in 25 Nigerian states to date. The Company’s user growth has increased 25% month-on-month.
Chief Executive Officer (CEO), CrowdForce Oluwatomi Ayorinde, said, “Fintechs and challenger banks are emerging in Africa to deliver better financial services via digital rails. It’s a fantastic development in the market, but cash is clearly still king in Nigeria. 97% of retail transactions happen offline. There is a clear need to build an offline distribution network to enable fintechs and challengers to reach the mass market – this is exactly what we’re doing at CrowdForce. and this round will accelerate our momentum even more.”
Founder and Managing Partner Aruwa Capita, Adesuwa Okunbo Rhodes, said, “We are excited to lead this investment in CrowdForce. We see significant value in the product as it is solving a real problem by providing access to critical financial services in rural areas that have been overlooked by traditional financial institutions. CrowdForce is actively deepening financial inclusion through its products and services, and has unique competitive advantages through its proprietary technology and extensive agent distribution network across the country.”
