As the technology landscape in Africa flourishes, an increasing number of individuals from the continent are securing remote employment with major tech companies and international startups. However, many of these freelancers and remote professionals continue to face payment hurdles — including difficulties in opening accounts that handle U.S. dollars, sluggish invoicing and payment systems, and complications arising from the use of incompatible payment platforms by their foreign employers.
Based in Lagos, Raenest is among the African fintech companies taking steps to alleviate this issue. With its retail offering, Geegpay, Raenest provides freelancers with virtual accounts in USD, GBP, and EUR to facilitate payments, manage multi-currency wallets, and perform currency conversions. Additionally, it offers both virtual and physical debit cards that support multiple currencies, including U.S. dollars.
In March of last year, Raenest broadened its services to cater to businesses, launching a new brand named Raenest for Business to facilitate international remittances. Recently, the startup garnered $11 million in Series A funding, spearheaded by QED Investors, to enhance its presence throughout Africa.
Expansion Beyond Freelancers
Interestingly, the founders of Raenest did not initially set out to target freelancers. Victor Alade and his co-founders Sodruldeen Mustapha and Richard Oyome founded the company in 2022 as an Employer of Record (EOR), aiding foreign companies in paying African employees while adhering to local regulations.
However, within a few months, the co-founders recognized that the primary challenge was not with the companies dispatching payments but with individuals encountering difficulties in receiving them.
“A U.S. company may not be overly concerned if a payment is delayed by five days, but for individuals in Nigeria or Kenya, that poses a significant issue—especially when converting to local currency adds another layer of complexity,” Alade, a former software engineer at Jumia and Andela, shared with TechCrunch.
Utilizing his experiences from remote work, Alade and his team, who also possess backgrounds with African fintechs such as LemFi and FairMoney, shifted their focus to solve this critical issue.
Initially, Geegpay found favor with freelancers, but registrations from businesses soon started to grow as well. The team realized that African enterprises required foreign accounts to simplify cross-border transactions. “Companies began inquiring if they could obtain fixed bank accounts to enhance their payment processes. That’s when we considered: What is the magnitude of this opportunity? Who else is developing solutions for Africa?” Alade remarked.
Raenest’s foray into business banking couldn’t have been more timely. Concurrently, U.S.-based fintech Mercury began imposing restrictions on business accounts from several nations, including parts of Africa. Simultaneously, competition in the EOR sector intensified, with significant players like Deel looking to service the continent more closely.
These developments prompted Raenest to capitalize on what it identified as a more favorable avenue: providing African businesses the means to send and receive international payments.
A Promising Strategy
This strategic shift appears to be yielding positive results. Since its inception in 2022, Raenest has facilitated over $1 billion in transactions — a remarkable 160% growth in the last two years — benefiting freelancers and businesses across the continent. Presently, more than 700,000 users utilize the platform for receiving payments from international sites like Upwork, Fiverr, and Gusto, alongside online shopping and subscriptions.
On the enterprise front, over 300 firms depend on Raenest to receive international payments, secure funding from investors, and conduct cross-border transactions. Its clientele includes startups such as Moniepoint, Helium Health, Fez Delivery, and Matta.
Raenest competes with various fintech startups offering multi-currency solutions in Africa, including Afriex, Cleva, Fincra, Grey, Verto, and Leatherback. Alade asserts that Raenest holds a competitive advantage by catering to both individuals and businesses, contrasting most competitors that focus solely on one customer segment.
The company’s aspirations go beyond facilitating cross-border payments. “We aim to create a secure and seamless financial ecosystem for Africans — empowering them to earn, invest, and build their wealth, irrespective of their location,” Alade disclosed, hinting at forthcoming product developments.
Plans for Expansion
At present, Raenest operates in Nigeria under a money transfer license. As part of its expansion strategy, the firm intends to strengthen its foothold in Nigeria and obtain licenses in Egypt, Ghana, Kenya, and the United States.
The company has established banking partnerships in the U.S. and U.K. and is actively pursuing additional collaborations in these markets as it scales. Throughout this journey, Raenest aims to attract talent to support its growth while consolidating Geegpay and Raenest for Business under a unified brand, Raenest.
The recent Series A funding round brings Raenest’s total funding to $14.3 million.
Lead investor QED, a prominent fintech venture capital firm, has been progressively increasing its investments in Africa since 2022. It has supported five fintech startups on the continent: Moniepoint, Remedial Health, Precium, Cedar Money, and now, Raenest.
“We strongly believe that bridging the divide between local and global markets, Raenest will unveil new prospects for African entrepreneurs, freelancers, and businesses, ultimately fostering greater economic empowerment throughout the continent,” expressed Gbenga Ajayi, partner and head of Africa and the Middle East at QED Investors.
Other participants in this funding round included pan-African VC firms like Norrsken22, Ventures Platform, P1 Ventures, and Seedstars.
Compiled by Techarena.au.
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