Nigeria-based OnePipe raises USD 3.5 mln

Africa-based impact-focused VC Atlantica Ventures, a co-lead investor in OnePipe’s USD 950,000 pre-seed round from 2020, also co-led this seed round alongside Tribe Capital and V&R Associates. New investors Canaan Partners, Saison Capital, Norrsken (the fund of Klarna founder Niklas Adalberth), The Fund, and Two Culture Cap also participated. Existing investors Chris Adelsbach, Techstars, Ingressive Capital, Acquity, P1, Raba, and DFS Lab followed on with new checks, alongside a few angel investors.

OnePipe’s original plan was to create an API gateway that connected banks and fintechs under a uniform standard, a move that would allow the company to perform core Open Banking. According to OnePipe’s CEO, upon continuous integration with financial institutions, it became clear the company needed to pivot since it wasn’t generating many demand cycles. Having struck partnerships with a few banks, OnePipe decided to take a step back and delve into the world of embedded finance.

Unlike Open Banking and data aggregation, where a company needs to collaborate with almost every bank in the country where they operate, it’s not necessarily the case with companies offering embedded finance. That’s why OnePipe has six partner banks now. By running API infrastructure on behalf of these partner banks and helping them monetise it, OnePipe works with non-financial institutions to launch and cross-sell an array of financial services such as credit, accounts, and payments within their offerings.  

So an FMCG (fast-moving consumer goods) startup, for instance, can plug into a bank’s API managed by OnePipe and begin to issue accounts to customers, allowing them to make payments off those accounts and access credit when they need it. In the 10 months OnePipe switched up to this model, it has processed more than 6.3 million transactions worth over USD 46.3 million, the company said. These numbers are from over 1 million individual accounts and 138+ businesses, ranging from FMCG and retail to lending and agriculture.

OnePipe takes a percentage cut from transactions made on these accounts and shares with its partner banks. For loans offered via its APIs, OnePipe takes at least 1% of the loan interest from its lending partners and shares it with the businesses and partner banks.

OnePipe is going through a strategic partnership route as it made a deal with Africa-based logistics and freight company Sendy to expand into other African countries. Per the company’s statement, the plan is to ‘pull a Stripe-Shopify-esque tag team’, TechCrunch concludes.