Africa’s fintech space is rapidly becoming a force to be reckoned with and a growing number of startups launched in the previous three years lend credence to this fact.
Added to this number is Stitch, a South African fintech startup, that has recently emerged out of stealth mode to raise $4m in seed funding, becoming the first African API fintech to close the largest round.
Impressively, even in a stealth mode, Stitch attracted the attention of leading investors for this funding round jointly led by London-based VC firm, firstminute capital, and US-based investment firm, The Raba Partnership.
Other participating investors- funds and angels- include CRE and Village Global, Norrsken, Future Africa fund (co-founded by Flutterwave’s Iyinoluwa Aboyeji), Venmo founder Iqram Magdon Ismail, founding team members at Plaid, and executives at Coinbase, Fast, Paystack, and Revolut.
According to the company’s released statement, Stitch will utilize the funding to deepen its growth in South Africa with plans to also expand its operations in West and East Africa.
Launched by Kiaan Pillay, Natalie Cuthbert, and Priyen Pillay, Stitch is on a mission to provide full API entry to monetary accounts throughout Africa starting with its first market, South Africa.
By means of its API, developers can connect apps to monetary accounts allowing customers to seamlessly share their transaction history and balances, confirm their identities, and make payments, among other things.
Similar to other financial infrastructure firms, the platform enables companies and builders to innovate around other services like private finance, lending, insurance coverage, funds, and wealth management.
Leveraging their vast experience in building API solutions, the founders set out to address a major challenge- a lack of infrastructure issues plaguing African fintech.
To hear Pillay, Stitch’s chief executive officer tell it, “We were looking for a way to let users cash out from their wallet to their bank account. We did this manually at first and then as a stopgap, we automated the process using screen scraping.
We realized that the automated solution to this manual problem could be a product by itself and that there were more elegant ways to do it.”
“There’s an incredible opportunity to provide a new generation of financial services in South Africa and across other African markets. At Stitch, we enable smart people in the ecosystem to unlock this potential and build amazing products and services, powered by our infrastructure,” he said.
Commenting on the game-changing impact of Stitch on the African fintech industry, Brent Hoberman, co-founder and general partner of firstminute Capital, said
“Stitch has the opportunity to become the core infrastructure enabling digitization in the financial services industry across the continent. Every online business in Africa can now easily embed fintech capabilities in their applications – facilitating online payments, increasing lending capacity, and streamlining KYC and identity checks – through the Stitch API,” he said.
“As a fellow South African, I’m excited to be partnering with a team of exceptionally talented local engineers with pan-African ambitions.”
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