Nigeria-based banking-as-a-service (BaaS) provider Anchor has raised USD 2.4 million in a seed funding round to expand its product offering. This financing round was led by Goat Capital, with participation from FoundersX, Rebel Fund, and existing investors, including Y Combinator and Byld Ventures.

Anchor entered the fintech scene a year ago after receiving over USD 1 million in pre-seed funding. Its core offering centres around providing APIs, dashboards, and development tools to assist programmers in integrating and constructing banking solutions. In Nigeria's competitive fintech landscape, which includes players such as JUMO, Maplerad, OnePipe, and Bloc, Anchor stands as one of the few BaaS providers.

According to TechCrunch, traditional banks have been slow in adapting to the evolving digital banking environment, making platforms such as Anchor attractive to neobanks and businesses looking to embed financial services into their products. BaaS providers see an opportunity to deliver personalised and cost-effective services to these enterprises, offering services such as bank accounts, payments, savings, and cards. What does Anchor do? Anchor establishes partnerships with regulated banking institutions, claiming to accelerate the process of creating banking products from years to mere days.

Initially, the company catered solely to customer accounts, but it has since expanded its offerings to encompass business accounts, card issuance, bill payments, bulk disbursements, cross-border payments, and developer-specific features, including an audit log system and developer webhooks. Anchor officials cited by TechCrunch emphasised that the company's breadth of offerings sets it apart from competitors in the market. The company's client base comprises fintechs, SaaS firms, ecommerce enterprises, marketplaces, and tech-enabled businesses, including Bujeti, Pennee, SeamlessHR, LifeBank, Waza, and Zit.ng.

Anchor claims to have facilitated more than USD 550 million in annualised total transaction volume (TTV) for its clients, experiencing a 30% month-on-month revenue increase. The company generates revenue through processing fees, account and card issuance fees, and interest income. Initially targeting large supermarkets and multinationals in Nigeria for embedded financing, Anchor adjusted its strategy after realising these businesses were not yet digitally prepared.

The company now focuses on tech-ready and digitally-enabled enterprises. Anchor's plans for the future Lessons learned in its first year include refining pricing strategies, developing revenue sources that positively impact clients' bottom lines, and enhancing compliance processes. With the recent funding injection, Anchor plans to double down on these areas, particularly focusing on improving its end-to-end compliance system, investing in value-added products such as its ledger system, and expanding its customer base.

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