African startups are starting to make a good case for an uncertain second quarter of 2020 despite the raging coronavirus pandemic. Barely a year in existence, Nigerian fintech startup, Okra, has defied the odds to raise $1 million in pre-seed funding from TLcom Capital — a $71 million Africa focused VC firm which hardly invests in early-stage companies or fintech.

“We’re building a super-connector API that…allows individuals to connect their bank accounts directly to third party applications. And that’s their African bank accounts starting in the largest market in Africa, Nigeria,” said co-founder Ashiru Jituboh.

Here Is What You Need To Know

• TLcom Capital is hardly known for investing in startups at their early stages or even fintech companies. The VC recently invested in the Nigerian edtech startup uLesson and Kenyan agritech startup Twiga Foods. 
• As part of the investments, TLcom Capital partners Ido Sum and Andreata Muforo will join Okra’s board.
• The startup intends to use the funding to hire fresh engineering talent as well as to take its product offerings that connect bank accounts to apps to new African countries — though it would not disclose where or when.

“We’re looking at three target markets that our clients are already in,” said Ashiru Jituboh. 

• Okra investor TLcom’s Andreata Muforo named Kenya — with one of the highest mobile money penetration rates in the world — as a likely candidate for the startup’s product services.

Why The Investor Invested

There seems to be a lot of reasons why TLcom Capital settled for the startup. Although the fund’s managing partner, Maurizio Caio, has last year hinted that TLcom was steering more toward investments in infrastructure oriented tech companies and away from Africa’s more commoditized payments and lending startups, the VC firm said it was attracted to Okra for its ability to serve the continent’s broader financial sector. 

“It’s a service that other fintechs can plug into and utilize, so it’s accelerating the growth of fintech across the continent…That to us was a big hook,” TLcom’s Andreata Muforo said in an interview. 

Another major factor that might have attracted the VC to the startup is its co-founder Fara Ashiru Jituboh. 

“We found her to be very strong and also liked the fact that she’s a technical founder,” said Muforo. 

Shortly after its launch, Okra attracted the attention of TLcom Capital in second quarter 2019, according to VC Andreata Muforo.

“TLcom’s general investment thesis for Africa is that given the high penetration of mobile, there are very large markets where demand is already proven and technology can play a true role in offering a superior value proposition over existing solutions,” Sum said.

“While education ranks high on both criteria, we struggled to find compelling solutions and teams that combine an ambitious vision, a deep understanding of the pain points and what people are willing to pay for, and a proven execution capacity,” the VC stated during its investment in Twiga Foods last year. 

With offices in London, Lagos, and Nairobi, the group closed its $71 million Tide Africa fund this year. TLcom has focused primarily on Series A and later investments, including backing Kenyan agtech startup Twiga Foods and Nigerian trucking logistics company Kobo360.

A Look, In Simple Terms, Of What Startup Okra Does

Founded in June 2019 by Nigerians Fara Ashiru Jituboh and David Peterside, Okra says it is a motherboard for Africa’s 21st century financial system. The Okra app allows you to connect your African bank account to an app. 

“We are building the industry’s “super-connector” by creating a secure portal and process to exchange financial information back and forth between customer, applications, and banks,” the startup says on its website. 

With Africa’s largest population of 200 million people, Nigeria serves as a major financial hub — but there’s still a disconnect between fintech apps and banks, according to Okra’s Ashiru Jituboh.

“Here in this market there’s no way to directly connect your bank account through an API or directly to an application,” she said.

Okra offers several paid packages for those types of integrations and opens up the code to its five product categories — authorization, balance, transactions, identity and accounts — to developers.

Okra has already created a diverse client list that includes mobile payments startup PalmPay, insurer Axa Mansard and Nigerian digital lender Renmoney.

The startup generates revenues through product fees and earns each time a user connects a bank account to a customer, according to Ashiru Jituboh.

On how the Okra differs from other well-funded fintech companies in Nigeria, such as Flutterwave or Interswitch, “The answer is we’re not doing payments, but what we’re doing is making processes with [payment providers] even smoother,” she said.

Ashiru Jituboh comes to her CEO position with a software engineering background and a strong connection to the U.S. Born in Nigeria, she grew up in and studied computer science in North Carolina.

She did stints in finance — JP Morgan Chase and Fidelity Investments — and then in tech companies before making the leap to founder. “I went to work in startups, but I was always employee number two or three,” said Ashiru Jituboh.

She decided to go all in on Okra after returning to Nigeria and noting the need for linking together the country’s emerging digital financial infrastructure.

“When we knew that it was a big addressable market is when we realized that all these fintech CEOs and CTOs were struggling with this use case,” she said.

As a sector, fintech has become the continent’s highest funded tech space, receiving the bulk of an estimated $2 billion in VC that went to African startups in 2019. Those ventures, and a number of the continent’s established banks, are in a race to build market share through financial inclusion.

By several estimates — including The Global Findex Database — the continent is home to the largest percentage of the world’s unbanked population, with a sizable number of underbanked consumers and SMEs.

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.