Nigerian Fintech Cleva secures $1.5m in pre-seed funding round

Nigerian Fintech Cleva announced that it has raised $1.5 million in a pre-seed funding round led by 1984 Ventures, a San Francisco-based early-stage venture capital firm. Other participants in the round include The Raba Partnership, Byld Ventures, FirstCheck Africa, Y Combinator and several angel investors. Cleva joins Y Combinator’s winter 2024 batch in January, 2024.

Launched in August 2023 by Tolu Alabi and Philip Abel, Cleva provides USD banking for Africans to get paid in USD, spend, and save in USD, no matter where they’re based.

The co-founders of this fintech startup believe that they can still compete in the $18 billion payment facilitation market for remote workers and freelancers in Africa. CEO Tolu Alabi says they bring onboard the much needed experience and that fact that they share a strong connection with the African market, being born and raised in Nigeria.

Cleva prides itself in being different from its competitors by opening a USD account for people in minutes without hassle and capping the charge for deposits received to $20. Competitors often apply an uncapped 1% fee regardless of the amount received.

Cleva commenced its services by introducing an offering exclusively for Nigerians, enabling users to establish USD accounts. The onboarding process involves providing a Bank Verification Number (BVN) and a government-issued ID. It’s noteworthy to mention that while Cleva focuses solely on USD accounts, other providers extend options for GBP and EUR accounts. Within the initial four months of its launch, Cleva claims it has successfully facilitated the creation of US-based accounts for “thousands” of Nigerians, processing over $1 million in monthly payments.

In support of the investment and the team behind the startup, Aaron Michael, a partner at 1984 Ventures says that “the team is uniquely qualified to address this given their experience building banking products at Stripe and robust platforms at AWS. The impressive early growth is a testament to the team’s unique capacity to execute across Africa and the U.S.”

Moving forward, Cleva anticipates the introduction of several upcoming products within its pipeline to enhance and diversify revenue streams, as revealed by CTO Abel. These offerings include USD cards and savings invested in U.S. assets. Despite encountering typical challenges faced by fintechs in its category, such as securing the right banking partner and talent acquisition, Cleva says it is poised to expand its reach to Africans in the diaspora. According to its website, upcoming products will encompass features allowing users to generate professional invoices and send USD globally, thereby entering a competitive remittance category where platforms like Flutterwave’s Send, Chipper Cash, and Lemfi are actively present.