CrowdForce secures $3.6 million to help communities that are disadvantaged get more access to cash

CrowdForce, a Nigerian startup, announced today that it has secured $3.6 million in a pre-Series A round. The equity-and-debt deal was led by Aruwa Capital Management, which received support from HAVAC and AAIC. The fintech company wants to increase its 7,000 active agent network by expanding its personnel, geographic operations, and marketing.

When co-founders, Oluwatomi Ayorinde and Damilola Ayorinde launched in 2015, it was known as MobileForms. They were looking to build a network of data-gathering agents. They wanted to acquire and produce accurate offline data (where 90% of the country’s economic activity lives) and provide insights on hard-to-reach rural and semi-urban areas for enterprises, NGOs, and development organisations.

CrowdForce’s idea first tipped in 2018 while working on TraderMoni, a modest credit program for micro-merchants pioneered by the Nigerian government. These traders were supposed to be given repayable loans to help them with their small businesses and lift them out of poverty. The problem, however, was that there was no database in which to run this software.

As a result, MobileForms’ 20,000 agents verified the identity of these 4.5 million traders who were otherwise eligible for the TraderMoni program. Then there was a problem of transferring money to them because most didn’t have bank accounts. This made it impossible for them to receive the loans. Then emerged a financial-service distribution network that allows any merchant to function as a mobile bank branch. Hence, the new brand name CrowdForce. 

While the YC-backed startup still operates its MobileForms products, PayForce, the company’s second product, seems to be doing better in the marketplace. The POS-enabled PayForce is used by merchants who double as agents to provide ATM services, money transfers, and bill payments to customers in locations where banks are generally absent and where cash demand is high. Agents can use PayForce to safely manage their cash flow and make more income as a result.

When these agents run out of money, their liquidity is compromised. When it happens frequently, customers begin to doubt the company’s commitment to keeping their funds liquid.

Over 200,000 Nigerian agents often refinance their working capital by walking large distances to the banks or fintechs they work for, like TeamApt. When it comes to lending money to agents, there are innovative ways, like the one brought on by Moni, where low-interest loans are supplied by way of a referral and screening process.

CrowdForce, on the other hand, adopts a different strategy. With the help of larger businesses like petrol stations, PayForce transforms them into mobile bank branches that offer float services and save their customers’ cash on the PayForce digital wallet.

The company also gives out POS terminals to pharmacies and reseller networks in addition to petrol stations. It claims to have the most liquidity among Nigerian agent banking networks, leveraging about N1.7 trillion through partners.

As stated in a press release, CrowdForce plans to use the investment to distribute more point of sale terminals to its partners over the next 12 to 18 months in order to offer financial services to every Nigerian within a distance of one kilometer, or 15 minutes.