Juicyway, a fintech startup from Africa utilizing stablecoin technology, is emerging from stealth mode following its successful processing of over $1 billion in transaction volume for countless African businesses during the past three years.
The fintech reports handling more than 25,000 individual transactions, resulting in a total payment volume (TPV) of $1.3 billion from approximately 4,000 users. Central to these transactions is stablecoin technology. As stated by the founders, these achievements were accomplished without the aid of a publicly accessible app or formal marketing campaigns.
Juicyway’s growth has been entirely organic, attributed to the acquisition of another business with a significant customer base, including the likes of Andela where one of its founders held an executive position, along with word-of-mouth referrals.
The company is now publicly launching after operating in stealth for three years, during which time it secured notable clients such as Bolt, IHS, and fintech companies like Piggyvest, Bamboo, and Afriex, as well as energy and logistics firm Mocoh SA.
For instance, a cross-border payments platform might cater to remittance services, allowing users in the United States to send funds to Nigeria. In such scenarios, Juicyway facilitates the liquidity needed to set exchange prices, allowing clients to convert dollars to Nigerian naira and ultimately disseminate the converted amounts to their users.
While traditional international payment platforms have been around for years, a new wave of stablecoin-powered systems is disrupting these conventional methods in both developed and emerging markets.
Instead of directly exchanging fiat currencies, these platforms utilize funds held in U.S. bank accounts to buy stablecoins like USDC or USDT on behalf of users. The stablecoins are subsequently transferred to digital wallets, where users can either retain the cryptocurrency or convert it into their local currency, resulting in a speedier, more flexible, and often cost-effective solution.
During their time at Andela, an African-origin global technical talent marketplace, and Bamboo, one of Africa’s largest retail stock brokerages, Justin Ziegler and Ife Johnson witnessed firsthand the difficulties their previous companies faced in managing cross-border transactions, despite the plethora of available solutions.
Ziegler noted that despite Andela’s successes and securing substantial funding, transferring those resources into the continent remained a challenge.
“It was baffling that although many solutions were available, they failed to address the issue satisfactorily for companies like Bamboo or Octa,” Johnson (now CEO of Juicyway) stated in a recent interview.
“Personally, I’ve also felt this gap. Without access to American banking systems or platforms like Juicyway, I wouldn’t be able to participate in the global economy as freely as I do today,” Johnson added.
This shared sense of frustration birthed Juicyway, which its founders tout as a solution aimed at “enhancing African engagement in the global economy.” Recently announcing a $3 million pre-seed funding round, the platform enables individuals and businesses to send, receive, and process payments worldwide, catering to both fiat and cryptocurrency transactions.
Facilitating liquidity for businesses
Africa’s contribution to the global currency market, valued at $5 trillion, is less than 1%, a situation partly due to the lack of liquidity for intra-African currency exchanges. Juicyway addresses this by providing clients access to liquidity pools for both local and international payments, as well as foreign exchange options via its web and mobile applications, alongside APIs for currencies like Nigeria’s naira, USD, GBP, and CAD.
The stablecoin platform showcases real-time exchange rates based on market demand, creating a “liquid ecosystem” that encourages competitive and transparent pricing, ultimately lowering remittance expenses. Market-driven pricing is integral to Juicyway’s operations in Nigeria’s fluctuating economy. The startup runs Naira Rates, Nigeria’s largest price discovery mechanism for the naira, attracting nearly 500,000 Twitter followers who utilize it to monitor foreign exchange rates.
Additionally, Juicyway provides multi-currency insured accounts for transactions facilitated through partnerships with Access Bank in Nigeria for remittance services; stablecoin infrastructure startup Bridge, recently acquired by Stripe, for the movement, storage, and acceptance of stablecoins; and Lead Bank, a major fintech partner bank in the U.S., offering customers virtual dollar accounts.
While utilizing crypto and stablecoin technology can significantly reduce costs and expedite settlements, these collaborations are vital for ensuring regulatory compliance and minimizing risk. To strengthen compliance measures, Juicyway has onboarded Joshua Wasserman, a former FDIC bank examiner and leader in compliance at Cash App, and is teaming up with Sumsub to enhance KYC, KYB, and KYT processes. This collaboration allows for the implementation of transaction limits and monitoring of user behavior anomalies to combat fraud and money laundering, as stated by the founders.
Juicyway is acutely aware of the risks associated with partnerships in the fintech space, especially in light of the recent Synapse incident, and is actively in discussions with various banks and payment processing platforms, according to Johnson.
“We’ve tackled the complexities of financial operations by distinctly separating the duties of our principal custodians and payment processors instead of relying on one entity for both functions. Nevertheless, this approach is not entirely fail-safe, so we are also diversifying our partnerships among banks and payment processors in those markets,” the CEO stated.
Juicyway generates revenue through processing and transaction fees, with a varying take rate ranging from 0.2% to 10% depending on certain transactions. Moving forward, the fintech aims to generate additional income by earning interest on customer balances, as Johnson detailed during the call.
Just two months ago, Yellow Card, another startup utilizing stablecoin technology for payment and treasury management services to over 30,000 businesses in Africa and beyond, secured $33 million in funding from various investors, including BlockChain Capital. This highlights a burgeoning trend of startups, such as Conduit, deploying stablecoin technology in cross-border payments across Africa and other emerging markets. While it’s uncertain if competitors like YC-backed Waza and Verto also employ stablecoins, their involvement in the cross-border payments arena positions them as rivals for the same customer base.
Although Johnson regards these startups as allies within the evolving cross-border payment sector, he asserts that Juicyway distinguishes itself through its focus on stablecoin orchestration, striving to address the needs of customers on both ends of the supply-demand spectrum. “Our primary goal is to broaden accessibility for Africans in the global economy, which guides our decision-making,” the executive emphasized. “This perspective compels us to prioritize product development and compliance over a strictly finance-led approach.”
Like its peers in the stablecoin ecosystem, Juicyway has had to obtain money transmitter licenses to operate not only in Africa but also across jurisdictions in the U.S., U.K., and Canada amid the regulatory uncertainties surrounding cryptocurrency and stablecoins worldwide. In the coming years, this three-year-old fintech plans to seek similar permits in additional African countries, intending to establish a platform where individuals and businesses can conveniently convert African currencies to local ones and vice versa.
The pre-seed funding round was led by early-stage African investor P1 Ventures, with contributions from Ventures Platform, Future Africa, Magic Fund, Microtraction, and various angel investors.
Compiled by Techarena.au.
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