VertoFX, an Africa and emerging markets-focused currency trading and payment startup has secured a $2.1 million investment led by Accelerated Digital Ventures. Also participating in the investment are Y-Combinator and several local angel investors in Africa.
Techcrunch reports that the London based company, with a subsidiary in Lagos, Nigeria, has created a platform that allows businesses and banks to exchange and make payments in exotic foreign currencies that don’t often convert or trade conveniently across businesses or banks.
There are around 40 global currencies that are considered exotic or illiquid, most of them in frontier markets in Asia, Africa, and the Middle-East and currently, 19 of those currencies are on the platform and the ability to settle in 120 countries, including China and the U.S according to Ola Oyetayo.
VertoFX was founded in 2017 by Oyetayo and Anthony Oduwole. The company was part of Y-Combinator’s 2019 winter cohort, was one of the winners of Demo Africa 2018 and processed around $7 million in transaction volume last month, according to Oyetayo.
“Our research says there’s about $400 million being done by small and medium scale businesses in Africa alone in transactional volume on an annual basis. If we take 1 per cent of that as a commission or transaction fee, that’s a $4 billion addressable market, just in the continent,” said Oyetayo.
VertoFX is also moving into offering market research—toward potential subscription services—on the currencies it trades, according to Oyetayo.
The startup will use the round for platform development, expand the currencies, and gain licenses in new countries. “We’ll also use the round for hiring, primarily in compliance and regulator type roles,” said Oyetayo. VertoFX already has a developer team in India and is looking at local developer talent for its Africa offices.