Softbank Seed Funds African Startup Exiting ‘Stealth Mode’

(Bloomberg) -- Credrails, a startup that plans to aggregate financial data across Africa, will this month close a $2.5 million seed-funding round with backing from Softbank Group Corp., according to co-founder Clara Wanjiku Odero.

The company, founded in 2020 by Wanjiku Odero and Teresia Kairu, has been working with a few customers in Kenya and Nigeria, offering lending analytics and reconciliation, and will now publicly offer its services to a wider array of customers, exiting what Wanjiku Odero describes as “stealth mode.”

“We are building the open banking infrastructure for Africa, we want to connect banks, mobile money, offline data into a single application programming interface that we then expose to businesses for other use cases,” she said in an interview this month. “We’ve been building it up quietly with a core set of customers to make sure that everything works.”

Credrails is one of a number of African startups that are rushing to take advantage of surging interest in the sector, with a record $5 billion in startup capital raised last year. By seeking to offer its services to banks, lending and payment companies it expects to profit from stitching together financial data from across the continent, which lacks banking infrastructure.

“We need to contextualize that data for them so we can tell them about their customers ability to pay whatever expenses they have, how much they can afford to borrow and so on,” said Wanjiku Odero, who previously helped payments firm Flutterwave Inc. expand. 

“Nigeria is definitely the fintech hub and Kenya is home,” Wanjiku Odero said of Credrails initial focus. By year end it expects to be in two other East African countries and one other African market, and plans to be working in as many as 20 countries by the end of 2023 serving 100 customers.

Competitors to Cred Rails include South Africa’s Stitch and Nigeria’s Mono and Okra, said Wanjiku Odero, who said her company aspires to have a wider African reach. 

In addition to Softbank, Credrails has been backed in its seed round by Unicorn Growth Capital and Samos Investments Advisory Ltd., she said. The backers took an equity stake in the company. Softbank said the funding was through its Softbank Vision Fund Emerge Program.

The fund is “an investment accelerator that promotes diversity in tech by partnering under represented founders with the capital, tools and network they need to scale their businesses,” Softbank said.

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