Nigerian fintech startup Cleva focused on creating a banking platform for African individuals and businesses to receive international payments with USD accounts, has raised $1.5 million in pre-seed funding. The round was led by San Francisco-based 1984 Ventures (backed Revv and Kyte). Other participants in the round include The Raba Partnership, Byld Ventures, FirstCheck Africa, and several angel investors. In addition, Y Combinator participated in Cleva’s pre-seed round.
Reportedly, the investment is a testament to the Cleva team that plans to execute across Africa and the US.
Brainchild of Stripe and AWS alums
Founded by Tolu Alabi and Philip Abel (MIT and Standford alums respectively) in 2023, Cleva’s product provides a means for Africans to navigate hyperinflation challenges. Africans face persistent challenges in receiving international payments for their skills and products. It is estimated that the market for facilitating payments for remote workers and freelancers in Africa to be an $18 billion opportunity.
Born and raised in Nigeria and moved to the US on college scholarships, both founders bring valuable technical and product experience from their roles at major tech companies, including Amazon, Stripe, AWS, and Twilio.
Initially launched its services to Nigerians, US- and Nigeria-based Cleva lets users open USD accounts, with onboarding requiring a Bank Verification Number (BVN) and a government-issued ID. The fintech has facilitated the opening of US-based accounts for thousands of Nigerians, processing over $1 million in monthly payments while experiencing month-on-month revenue growth of 100%.
The startup generates revenue when users swap and exchange their funds in USD accounts for the local currency. Also, it charges a 0.9% fee on deposits into customers’ USD accounts. It caps fees at $20, while competitors are said to charge an uncapped 1% fee, irrespective of the amount.
Plans ahead for Cleva
Cleva has several upcoming products lined up to diversify revenue streams, including USD cards and savings in US assets. It scales through the common challenges for fintechs in its category, including choosing the right banking partner and talent. It also plans for a product that will let users create professional invoices and send USD globally.
Aaron Michael, a partner at 1984 Ventures, said, “The team is uniquely qualified to address this given their experience building banking products at Stripe and robust platforms at AWS. The impressive early growth is a testament to the team’s unique capacity to execute across Africa and the U.S.”
“Then there’s the market opportunity,” noted Tolu Alabi, co-founder of Cleva said. “The problem that we’re trying to solve, which is enabling people to receive international payments, is not a Nigerian problem nor an African one. It’s a global problem; people in Latin America, Asia, and even Canada need to receive dollars for their work and service. We’re starting with Nigeria because we know the market and it’s also a big market. But we feel like because of our backgrounds, we’re very well positioned to solve this problem at a global scale.”
