The startup previously raised more than $500,000 through a combination of equity financing and grants.
With the investment, the firm plans to increase its customer base, expand its product offerings, support more fund managers in Nigeria, and build out its investment management infrastructure.
Founded in 2017 by Razaq Ahmed and Edward Popoola, Cowrywise is building a savings and investment culture among the growing population of underserved African middle class and millennials.
Additionally, the startup is democratising access to savings and investment products to the growing demography of underserved Nigerian millennials and the middle class.
Today, Cowrywise has more than 220,000 users compared to its first year when it had just 2,000 users.
On its future plans, the startup hopes to increase the number of Nigerians investing in mutual funds. Currently, available data shows that there are only half a million Nigerians actively investing in mutual funds.
When compared to the total number of active bank accounts in the country of more than 40 million, it is obvious Cowrywise still has room to grow in the $3 billion market.
It is noteworthy to add that the founders wanted to ride on the telecom industry’s reach to drive its investment products to millions of subscribers at their early stage.
But it didn’t turn out as planned, as the project became expensive to undertake, and also, the telcos requested cutthroat prices and commissions.
The first set of products launched to the market were savings-related products backed by fixed income instruments like treasury bills.
Following that was the introduction of its mutual funds’ products. Currently, the company has 19 different mutual funds and at least 20% of the total mutual funds in the country are listed on its platform. Ahmed claims this is the largest portfolio of mutual funds a single entity has in the country.
These assets cut across five investment partners, and they allow users to save and invest with as little as ₦100 ($0.25).
The partners include United Capital Asset Management, Meristem Wealth Management, Afrinvest Wealth Management, ARM Investment Managers and Lotus Capital.
Johan Bosini. Partner at Quona Capital said on the Cowrywise investment said: “Razaq, Edward, and the Cowrywise team are providing everyday Nigerians with easy access to powerful and flexible wealth-generating tools that have typically been reserved for people who are already wealthy.
“In a market of 200 million people, we think this will be very impactful for individuals to have more control over their financial future.”