Mono, an African startup that helps connect consumersâ bank accounts to financial applications, has reportedly raised a $15 million Series A round.
The round, led by Tiger Global the VC firmâs third major investment in Africa this year afterÂ FlutterwaveÂ andÂ FairMoneyÂ â also had participation from new investors Target Global (an investor in neobank Kuda), General Catalyst and SBI Investment.
New investors were joined by existing ones, including Entree Capital, Lateral Capital, Golden Palm Investments, Acuity VC and Ingressive Capital, bringingÂ Monoâs total raise to a little over $17.5 million since launching last year.
More than half of the population isÂ either unbanked or underbanked.Â Open finance players in Africa like Mono â mirroring Plaidâs success in the U.S. market to theirs â thrives on the notion that access to a financial ecosystem via open APIs will improve access to financial information and lower entry costs for the underbanked.Â
With the likes of Okra, Plaid, Stitch and OnePipe also streamlining various financial data in single APIs, the battle to provide customersâ financial information to companies and third-party developers is heating upÂ nicely, hence theÂ need to ship more innovative products down the line.
In Monoâs case, two products give it an edge, according to CEO Abdulhamid Hassan. First is,Â DirectPay, aÂ product that helps Nigerian businesses to collect bank transfer payments from customers within their web or mobile app without using their debit cards. Think of what Flutterwave and Paystack have done with cards; Mono wants to do that with bank accounts.
Next,Â Statement Pages allows businesses to access customersâ financial accounts without needing a developer; Hassan calls it the first of its kind in Africa.
But even with theseÂ additionalÂ features tailored to a Nigerian audience, Mono is going after other markets like Ghana and Kenya, first mentioned by the CEO in May.
Mono has delivered on only Ghana, for now, piloting with a few banks and fintechs such as Oze and Tranzo.Â Kenya, on the other hand, is still within its radar asÂ one out of three countries (including Egypt and South Africa) Mono plans to expand into next year.
Hassan adds that Mono might complete the move to South AfricaÂ via a partnership with Absa bank this year.
When open finance startups in Africa began to gain some attention last year, the consensus was that each company could do significant business in the big individual markets they had first launched with.Â But it doesnât seem that way anymore,Â as Mono, Stitch, Pngme and Okra now operate in other African markets.
âI feelÂ like NigeriaÂ is cappedÂ in terms ofÂ how many businesses we can target,â said Hassan, who co-founded Mono with Prakhar Singh, over a call.
By the end of next year, Mono will be present in five African countries, a move that slightly suggests that the company might be spreading itself too thin.
Tiger Global Backs African Fintech Mono In $15M Series A round
Questioned whether investor pressure or competition was fuelling the need for Mono to expand quickly,Â Hassan reckoned that the company made such decisions solely because of its customers.
âEverything that we do at Mono isÂ mostlyÂ customer-driven. Customers who want to launch lending or fintech apps in these countries say they canât do so unless Mono is there,â he said. âBased on how weâve built our relationship and the kind of products weâve built in Nigeria, people rely on us and say when we go to a country, they would also want to launch there.â
Thereâs also a vertical expansion play for the company as itÂ looks to offer enterprise solutions to FMCGs, law firms â non-tech and traditional industries with the capability to command more transaction volume.
Talking of numbers, Mono claims to have processed over 200 million financial data transactions from over 270 businesses, developers and fintechs.
The company also said it has connected over 150,000 bank accounts in the last two months and is growing 45x year-on-year in that regard. With around 30 staffers today, Mono doubled its headcount from the previous year, according to its CEO.
Activity in the global open finance market has beenÂ ironicallyÂ buoyed by Visaâs failed takeover target of Plaid. And investorsÂ have not slowed down in backing startups in other regions which they feel could be major acquisition targets for the U.S. company if it decides to expand.
Mono is one such candidate in Africa and lead investor Tiger Global knows that. According to Hassan, the VC firm reached out to lead a new round and though Mono didnât plan to raise any additional capital this year, the capital from Tiger Global would help it grow faster.
âWe feelÂ the team at Tiger felt we were doing something amazing but thought what we had raised wouldnât help us build a big company. And they were like, âwe want to help you build a big company,â â said Hassan.
Tiger Global confirmed it led the investment in an email to TechCrunch.
As one of Africaâs fastest-growing startups, Mono has closed early-stage rounds in a manner rarely seen on the continent. LastÂ September, the company hadÂ justÂ completed a $500,000 pre-seedÂ investment with a handful of local investors. Then itÂ took partÂ in Y Combinatorâs most recent winter batch,Â raising $2 million in seed fundingÂ upon graduation before raising this Series A round.
However, not everyone measures growth this way. These days, startups burn a lot of money to scale fast but have little or no revenue to show. And in Africa, side remarksÂ are often thrown about on howÂ such models might lead to long-term unprofitability for high-flying startups such as Mono.
When asked if that was a concern to the company, which has a valuation north of $100 million, Hassan said, âthe first thing you look for when youâre building a startup is not profitability but I will say that our revenue has grown ten times since our last raise in May.â
Monoâs present revenue is equivalent to what it did in the last three months combined, continued the CEO before referencing how the companyÂ is pursuing growth, scale and profitability with a lean team to âbuild the best open banking platform in Africa.â