FrontEdge Secures $10 Million in Funding to Fuel African Cross-Border Trade Growth

FrontEdge, a Nigerian fintech operating out of Lagos, has successfully raised $10 million in a seed round, with over 70% contributed through debt financing. The funding aims to drive the expansion of African cross-border trade. Established in 2021 by Moni Alli, a former McKinsey consultant with a background in digital transformations for tier-one banks, FrontEdge specializes in providing SME exporters and importers with working capital and software tools for seamless cross-border and international transactions.

The fintech addresses the SME financing gap in Africa by digitizing processes and tailoring solutions specifically for SMEs engaged in cross-border trade. Unlike traditional banks, FrontEdge offers upfront capital to exporters based on transaction-based underwriting without requiring collateral. The timing of its intervention varies, often engaging when goods are on an actual vessel or at the warehouse. This approach accelerates receivables, allowing exporters to participate in more transactions.

FrontEdge has evolved beyond a lending-first platform and now provides a comprehensive suite of services. It integrates with various databases to offer insights into cross-border trading dynamics and underwrites offshore credits of buyers. Additionally, the company facilitates the setup of overseas offshore accounts, addressing challenges related to capital controls and high fees within the banking system.

The fintech acts as a vertical bank tailored to the needs of African traders, covering financing, cross-border payments, and offshore accounts. It also offers software tools such as logistics management, cargo insurance, and document management to complement its financial offerings. FrontEdge’s customers, SME exporters, have reportedly experienced significant growth, with a 20% month-on-month increase since its launch. The company generates revenue from the transactions it finances and claims a zero default rate after performing over 50 contracts.

Looking ahead, FrontEdge plans to utilize the funding to hire more talent, scale its financing product across Nigeria, Ghana, Ivory Coast, and Kenya, and launch additional products to diversify its revenue streams beyond financing.

Lead investor TLG Capital, along with other backers including digital freight forwarder Flexport, supports FrontEdge in its mission to empower African SMEs and provide crucial access to capital for exporters engaged in global trade.