Duplo, a Lagos-based fintech that aims to reduce inefficiencies in the FMCG industry by automating payment flows for B2B businesses, has raised $1.3 million in a pre-seed fundraising round led by Oui Capital, an early-stage pan-African venture capital firm. MyAsia VC, Y Combinator, Flutterwave CEO Olugbenga “GB” Agboola, and Mono CEO Abdul Hassan were among the local and foreign investors who also took part.
“We are trying to make cash obsolete in Africa where lots of businesses in the distribution space heavily transact in cash for obvious reasons,” said the chief executive officer to TechCrunch in an interview.
“So, we’re focused on distributors, merchants and aggregators to stop the use of cash in this value chain because everyone knows how expensive cash is and how difficult it is to move with issues around theft and fraud.”
Duplo plans to use the majority of the funds to improve its product, technology, and sales, as well as expand into new markets such as tourism, farming, B2B marketplaces, and alcohol and beverage distribution.
Why The Investors Invested
The company has reported considerable traction and had been accepted into the Y Combinator accelerator’s current winter batch. Customers reported cost savings of more than 12% over the three-month pilot period, according to the firm, which launched its pilot three months ago. Duplo has also increased by 60% month over month to service over 20 enterprise companies. Currently, it has processed over $380,000, but according to the CEO, Duplo expects to reach $40 million in annualized TPV by the end of Q2.
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“We’re excited to support Yele, Tunde, Emeka and the rest of the team at Duplo as they look to build a scalable B2B payments platform for the African market,” said Peter Oriaifo, principal at Oui Capital, in a statement sent to TechCrunch. “We believe that with the proliferation of commerce in Africa, there’s an emerging need for solutions such as Duplo’s that help abstract away complexities around payments.”
A Look At What The Startup Does
Yele Oyekola, a former product lead at fintech startup Carbon, founded Duplo as a result of his work as an economic policy officer for the United Nations in Africa, where he saw firsthand how individuals and businesses were overly dependant on currency while travelling several nations.
Distributors can use Duplo to build individual virtual accounts for retailers and agents to make real-time payments or bank transfers, and the platform will automatically reconcile their books.
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Unlike in the FMCG industry, where making bank transfers can be costly for some retailers and agents, Duplo allows retailers to make transactions to virtual accounts using mobile money agents while reconciliation is completed thereafter.
Every transaction carried out on Duplo’s platform is subject to a 1% fee. Businesses also pay between NGN100 ($0.20) and NGN1,000 ($2.00) to open virtual accounts, depending on their size.
There is a no-code solution for B2B enterprises to maximize trade with their business clients, vendors, and suppliers, in addition to products that enable B2B companies to automate their payment flows. The platform also provides a dashboard to attribute payment flows to a certain customer, store, or region, as well as the ability to issue or pay invoices, offer credit to their business customers, and extend credit to their business customers.
“The way we see our value prop is we help businesses automate, embed and launch payment products. So basically, inflows or outflows, automatic reconciliations for businesses and embedding payments into marketplaces. And then we also have businesses that want to provide BNPL services to smaller businesses,” said Oyekola, who co-founded Duplo with Tunde Akinnuwa in September 2021.
Akinnuwa, the company’s CPO, previously headed JumiaPay’s loan and consumer payments. Duplo’s CTO is Emeka Okwuagwu, who formerly worked at ARCA Payments as an engineering manager and has experience designing fintech products for banks.
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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