Atlantica Ventures, Again, Leads $3.5m Seed Round In Nigerian Fintech API Startup OnePipe

OnePipe, a Nigerian fintech API startup has raised $3.5 million in seed funding to expand its embedded finance offering. 

Atlantica Ventures, which was a co-lead investor in OnePipe’s $950,000 pre-seed investment last year, joined Tribe Capital and V&R Associates to co-lead this seed round.

Canaan Partners, Saison Capital, Norrsken (the firm founded by Klarna founder Niklas Adalberth), The Fund, and Two Culture Cap were among the new investors. Existing investors Chris Adelsbach, Techstars, Ingressive Capital, Acquity, P1, Raba, and DFS Lab, as well as a few angel investors, followed up with new checks.

onepipe CEO Ope Adeoye
onepipe CEO Ope Adeoye

“We raised a round last year to focus on one use case of the partnership, which was to pull together the APIs of a fixed set of banks and offer embedded banking or banking as a service play,” said CEO Ope Adeoye. “Meaning, we make it possible for non-financial institutions, or businesses in general, to offer banking services to their customers.”

Why The Investors Invested

Investors were attracted by the metrics OnePipe has on the ground. The startup has processed more than 6.3 million transactions totaling $46.3 million in the ten months after switching to embedded finance as against its orginal model of open banking , according to the company. These figures come from over a million individual accounts and 138 different businesses, ranging from FMCG and retail to lending and agricultural. OnePipe takes a cut of all transactions on these accounts and splits it with its partner banks. OnePipe takes at least 1% of the loan interest from its lending partners for loans made through its APIs and shares it with enterprises and partner banks.

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According to Aniko Szigetvari, the founding partner at Atlantica Ventures,
“In our view, embedded finance is the next enabler for both traditional and financial service businesses to increase customer loyalty and revenue by offering a wide range of third-party financial products and revenue streams for their customers.” 

Based in San Francisco, California, Tribe Capital is a venture capital firm founded by former Social Capital partners Chamath Palihapitiya. During the summer of 2018, Ted Maidenberg, Arjun Sethi, and Jonathan Hsu left Social Capital. In March, Tribe launched a Special Purpose Acquisition Company. Carta, a financial firm, and Kraken, a cryptocurrency exchange, as well as Relativity Space, a 3D printing and rocket company, and Instabase, which develops enterprise AI technologies, are among the companies in its current fund.

Based in Dublin, Ireland, Two Culture Cap, made 14 investments across 4 continents in 2020 alone. 

Based in California, Canaan is an early-stage venture capital firm that invests in both early and stage businesses. 

With headquarters in Singapore, Saison Capital usually invests in Seed to Series A companies across South East Asia and India.

A Look At What OnePipe Does

Launched in August 2019 by Ope Adeoye and a team of about six, OnePipe works with non-financial institutions to launch and cross-sell a variety of financial services such as credit, accounts, and payments within their products by maintaining API infrastructure on behalf of its partner banks and assisting them in monetizing it.

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So, for example, an FMCG business can use OnePipe’s API to connect to a bank’s API and start issuing accounts to clients, allowing them to make payments and obtain credit when needed.

OnePipe is now only available in Nigeria, but it is expanding beyond the country’s borders in response to Szigetvari’s statement.
Adeoye added that OnePipe has entered into a strategic agreement with African logistics and freight company Sendy in order to grow into other African countries. The idea is to “pull a Stripe-Shopify-esque tag team,” according to the company’s announcement.

“We made sure that before we looked into other African countries, we were going in with a customer on the ground already,” said the CEO. “We did a deal with Sendy that made them participate in this round, and we will then deploy the capital for expansion. So as they go to Egypt, South Africa, we’ll be deploying with them and grow together.”

Adeoye explained why OnePipe has only 6 banking partners at the moment, thus: 

“The caveat goes like this, the moment you make a positioning play for banking as a service, all you really need is one partner bank that lets you go deep because the embedded finance [offering] is about depth and not breadth,” said the CEO.

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“If you go for data aggregation or open banking in general, then you are going for breadth, not depth. So on our side, we said we’d rather go with tier two and tier three bands, where once you describe the concept to them, they get it. It powers their growth and is more valuable to them, unlike other larger financial institutions.”

OnePipe API OnePipe API

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer