Lagos is Nigeria’s startup capital, but other cities appear to be catching up. Joining the growing number of cities in Nigeria which have attracted tech startup investments is Kaduna, based in north western Nigeria. A fintech startup Sudo Africa, which is located there and which offers a card-issuing API to developers and enterprises, has landed $3.7 million in pre-seed capital.
Global Founders Capital (GFC), based in San Francisco, led the financing. Picus Capital, LoftyInc Capital, Rallycap Ventures, Kepple Africa, Berrywood Capital, ZedCrest, and Suya Ventures are among the investors.
Several African fintech entrepreneurs, like Olugbenga ‘GB’ Agboola, Ham Serunjogi, and Odun Eweniyi, are also investors.
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“At some point, we wanted to issue cards and worked with one of the local banks in Nigeria,” said CEO Bakori. “They got to print up to 1,000 cards, but it took a lot of time and none of them functioned because the bank wasn’t able to provide any APIs for us to either manage the cards or even control the usage of those cards. That was the first time we came around, thinking about how to issue cards.”
Sudo Africa plans to expand to other African markets with this investment.
“Our concern right now is to expand into other African countries. So we’re looking at before the end of this year, we’ll probably be in three or four more African countries,” said the chief operating officer.
L-R: Kabir Shittu (COO) and Aminu Bakori (CEO). Credits: Sudo Africa
The startup’s unique proposition drew a majority of investors to this round. Sudo Africa is presently the only company in its market that provides virtual and physical cards to Nigerians. Despite being founded in Zambia, its continental competitor Union54 has consumers all around Africa. Flutterwave claims to assist retailers in 35 African markets in issuing virtual cards, with physical cards currently available only in Nigeria.
A Look At What The Startup Does
Sudo Africa, founded in 2020 by Aminu Bakori and Kabir Shittu, was inspired by a problem they encountered while attempting to issue cards at their previous startup: a mobile wallet system that allowed users to collect current financial institutions into a single platform and conduct transactions.
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Sudo Africa’s customer pitch is that whereas banks take weeks or months to issue cards, Sudo Africa does so in days.
The company’s infrastructure, which is built in collaboration with licensed card issuers, allows it and any developer or merchant who joins its platform to issue virtual and physical cards to their clients. Businesses can also customize and program cards to their liking, add functionality, and securely integrate with other services on the platform.
For example, a company might utilize Sudo Africa to issue cards for employee spending management; when employees need to use the card, an API is called each time to decide whether to accept or refuse the transaction in real time.
“This is beyond just creating a prepaid card, funding that card and then allowing the customer to spend where he wants to,” said Bakori.
“So all of these controls that we’ve set up on the card, like the spending controls where you can set how much can be expended, where it can be expended, and when, put the company in the front line and say, ‘hey, these are all the transaction details and spending controls, but still, do you want to go ahead and approve this transaction?’ This opens up a flow of opportunities for the fintechs and companies that use our platform.”
Sudo’s customers come from a variety of industries, according to Shittu, the company’s COO. Fintechs, microfinance banks, non-tech organizations, government agencies, logistics firms, commercial banks, and e-commerce firms are among them, according to him.
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When its issued cards are used to execute an online or POS transaction, the company collects interchange fees, and it takes authorization fees when spending and location-based controls are performed. According to Shittu, Sudo collects lower card production and personalization fees than incumbents.
Sudo Africa card Sudo Africa card
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