- VertoFX Secures $2m Investment Capital
A business to business currency trading and African focused startup, VertoFX, just raised $2.1 million to expand operations.
VertoFX developed a platform that allows businesses, including banks, to exchange payments in exotic foreign currencies that don’t convert easily across businesses or banks.
According to the startup, South Africa’s Rand is Africa’s most convertible currency, meaning the high demands allow lower spreads and transaction costs. While Egyptian pounds and other African currencies are generally difficult with higher commissions given their low demands.
“That’s the reason we are utilizing technology to create a marketplace model and price discovery to create liquidity for these currencies,” VertoFX founder Ola Oyetayo stated in an interview with TechCrunch.
Oyetayo explained that almost 40,000 global currencies considered exotic or illiquid are in frontier markets, Africa, Asia and Middle-East.
He also noted that the huge number creates an opportunity for an online marketplace and making payments in these currencies.
“Our research says there’s about $400 billion being done by small and medium-scale businesses in Africa alone in transactional volume on an annual basis. If we take 1% of that as a commission or transaction fee, that’s a $4 billion addressable market, just in the continent,” said Oyetayo.
Oyetayo and Anthony Oduwole, founded VertoFX in 2017 after resigning from their banking jobs.
The co-founders said the company processed about $7 million transactions last month.
However, when asked if they will be willing to accept an acquisition offer from big banks in the future. They said it is not part of the plan.
Oyetayo said: “We both come from big banks and if we’d wanted to go down that route we’d have developed this more as a software as a service platform,” he said.
“We’re playing the long game here, and I don’t think acquisition is the end game,” he added.