Lemonade Finance, a payments startup that enables Africans living in other countries to send and receive money back home, has raised $725,000 in pre-seed capital.
According to the startup, YCombinator, an American startup accelerator, and venture capital companies Microtraction, Ventures Platform, and Acuity Venture Partners participated in the investment round. A number of other private investors also contributed to the round.

“The existing remittance options, some of which are led by big players, are not nimble enough. For instance, many Africans abroad own businesses back home and need to hold money in two currencies. They also need to move such funds quickly, sometimes for needs and purposes that are urgent. A Nigerian user of Lemonade in the U.K can hold the Pound Sterling and the Nigerian Naira, easily converting one to the other. Users can also transfer the money back and forth from Nigeria without needing to wait days,” said co-founder Ridwan Olalere. 

The new money will allow the team to strengthen its squad, improve the app’s functionality, and expand the number of nations covered.

Why The Investors Invested

Microtraction and Ventures Platform said they’re confident in Lemonade’s solution’s effectiveness. Microtraction’s Managing Partner, Dayo Koleowo, said in a statement:

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“Lemonade’s solution is very timely. As a multi-currency financial service provider, they make it easy for the African diaspora to send and receive money from their new country of residence, which is remarkable. We believe Rian and Ridwan have the technical and financial know-how to provide the number 1 cross-border neo-bank for Africans in the diaspora.”

Kayode Oyewole, a partner at Ventures Platform also said:

“We are excited to back Ridwan, Rian and the Lemonade team, who have built a compelling financial product to serve the more than 100 million Africans in the diaspora, who today have limited access to great financial products. The founders are rockstars with deep experience building and scaling products to reach millions of users.”

A Look At What The Startup Does

Founded in 2020 by Rian Cochran and Ridwan Olalere, Lemonade is helping Africans send and receive money from their home countries in efficient, affordable, and fast ways.

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Former Opay employees Rian Cochran and Ridwan Olalere saw the need to fix the payment problem that many Africans in the diaspora confront while working on a project.

Lemonade differs from other companies in the industry, such as ChipperCash, Fliqpay, and Afriex, since it allows customers to keep their balances in the currencies that matter to them, according to the startup’s co-founder Ridwan.

“Before Lemonade, international money transfers that should take minutes took days. Those are hours of stress and anxiety for you and your family while your money is stuck in transit. It also makes it difficult for many Africans abroad, who own businesses, to keep those ventures running. We are solving that with great rates and instant transfers across borders. It is a game-changer for the African diaspora,” said Ridwan who also remarked that the startup is backed up by a number of testimonies from Nigerians, particularly in Canada. 

Lemonade was one of nine African businesses accepted into Y Combinator’s Summer 2021 (S21) batch in June.

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Lemonade Finance is now operational in Canada, a country with a rapidly rising African population. According to Ridwan, the company plans to begin in the United Kingdom, another country with a sizable African population. He mentioned that the team intends to go live in Ghana in the near future.

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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.
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