London-based Zazuu raises $2m from Launch Africa, Founders Factory, others
Payment platform Zazuu announced that it has recently completed a $2 million raise.
The fundraising round saw participation from Launch Africa, Founders Factory Africa, Hoaq Club, Tinie Tempah, Jason Njoku (CEO of IrokoTV), Babs Ogundeyi (CEO of Kuda Bank) and other angel investors.
Founded in 2018 by four African-born entrepreneurs, Zazuu’s mission is to provide Africans in the diaspora with smart ways to move money.
According to the most recent report from the World Bank, the global cost of moving money across borders averages around 6.09% of the value of the transaction. That figure can sometimes get as high as 22% for money sent to African countries. While infrastructural challenges are often cited as a leading cause of the high costs of remittances, according to the World Bank, lack of transparency among remittance providers is actually the leading challenge. To quote Remittance Prices Worldwide, a World Bank initiative, “In addition, a lack of transparency in the market has had the impact of reducing competition, as consumers tend to continue to patronise traditional market players because they are not aware of and cannot compare services, fees, and speed of their existing remittance service against other products.”
The four founders, Kay Akinwunmi (CEO), Korede Fanilola (COO), Tola Alade (CDO), and Tosin Ekolie (CTO) have diverse professional backgrounds ranging from technology, to design to banking and finance. However, as Africans living in the diaspora, dealing with institutional biases like unfair remittance practices has been a unifying experience.
“In 2018, I sent about $3,000 back home to Nigeria. I thought I got the best deal on that transaction until about two weeks later when someone informed me I could have saved up to $30 in fees on that transaction if I had used a different provider. I was livid,” shared Korede Fanilola. “We all have experiences like this where we only discovered in hindsight that we had lost more than we should on transactions back home simply by choosing the right provider.”
“The mission has always been simple for us from day one. Africans have consistently gotten the shorter end of the stick with remittance transactions. We discovered that the primary reason for that was a lack of transparency on the part of the providers. We’re solving that problem by building a smarter way to transfer money. With Zazuu, users can search multiple money transfer providers in their region, compare the rates and fees, and then choose who to send money with, at no extra cost,” Kay Akinwunmi added.
Over the two years of operation, Zazuu has evolved from a simple chatbot informing users of the daily rates in Facebook and Telegram groups, to an FCA-licensed organisation in the UK with users in eight countries across North America and Europe. Nearly a hundred thousand users have used the current iteration of its search-and-compare service to find the best rates for their corridors.
Speaking on the recently raised round, Kay Akinwunmi said, “We’re happy about the specific investors that have joined us on this journey. We’re always on the lookout for smart investors who offer more than just money; people who share in the vision of a better, fairer world for Africans. With their support, we believe we can build a more equitable financial services ecosystem.”
On why they backed Zazuu, Zach George, managing partner at Launch Africa had this to say, “Zazuu is building a true marketplace for financial services, starting with remittances and payments. We believe their business will bring fairer, more transparent pricing and better cross-border mobility of money across the African continent.”
Sam Sturm, chief venture architect at Founders Factory Africa also added, “At FFA we look to support exceptional founders in turning great ideas into ventures that are designed to scale. The opportunity to innovate within the remittance space is massive; it’s opaque and fragmented, which means that it’s inefficient and ineffective for users. In teaming up with Zazuu, we saw an impressive team addressing a problem that’s worth solving, with a solution that has massive growth potential.”
Get the most from the Africa Private Equity News app by registering a free account. Go to the app home screen and tap the round orange icon in the top-right of your screen.