Nigeria’s Startup, Grey Raises $2M for Regional Expansion, Cross Border Payments

Grey Finance, a fintech startup that provides virtual international bank accounts for African freelancers and remote workers, has raised $2 million in seed funding.

In July 2020, Idorenyin Obong and Femi Aghedo founded Grey Finance as an instant exchange service company that focuses on exchanging foreign currencies in domiciliary accounts to local currency at parallel market rates or close to parallel market rates.

Earlier this year, the startup metamorphose from Aboki Africa to Grey Finance in an effort to accommodate more financial services, access more markets and deepen its presence across Africa.

Explaining the reason for the changes, Obong, the CEO, said “We are expanding our business scope and have outgrown our original mission.”

“Grey is inspired by the colour. It is solid and stable and inspires calm, balance and composure. That is what we want people to feel every time they use our service.”

Due to the bottleneck in Nigeria and Africa’s payments, many fintech startups have started integrating remittances as one of their numerous services. This includes Flutterwave, even though it was the reason for the company’s indictments in Kenya, and recently, in Ghana.

Last year, Grey Finance raised an undisclosed pre-seed investment and was accepted into Y Combinator’s (YC) winter batch for March 2022.

YC is an American technology startup accelerator, launched in March 2005. It has been used to launch more than 3,000 companies, including Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Quora, PagerDuty, Reddit, Stripe, and Twitch.

Since then, Grey had expanded into East Africa, with Kenya as its entry point. The startup according to Obong, partnered payments giant Cellulant and edtech upstart Moringa, two Kenyan leading payment companies.

“We went with Cellulant to power our payment infrastructure for Kenyan shillings,” said the Chief Executive Officer.

“Moringa is like an avenue and channel for training new tech talent, so it made sense to have such a partnership as we are trying to build this for freelancers.”

Grey Finance USD Account Suspension

While the company claimed its Nigerian and Kenyan users can seamlessly receive foreign payments from more than 88 countries, convert them into their local currencies and subsequently withdraw into their local bank accounts, recently the company’s US Dollar bank accounts were suspended by its U.S. partner, leaving its U.S. freelancers stranded for months, Investors King investigation shows.

In one of his numerous emails to customers, Femi, Co-founder and COO, Grey said “We encountered an issue earlier today that affected only our USD accounts — and unfortunately have to perform an immediate system upgrade, which will disrupt the function of USD accounts.

“We are working on rectifying the underlying problem with our banking providers. This upgrade will begin tomorrow, Wednesday, 18 May 2022. We will update you in the next 48 hours on our progress.”

However, the said upgrade lasted for two months as USD service was only restored on July 13, 2022. Raising concerns if the issue is more than just an upgrade.

Meanwhile, Grey has now doubled its functionality to support payouts in Ugandan shillings, making six currencies the platform now supported.

Although it is yet to launch in the country, Obong said Uganda is in Grey’s regional purview as well as fellow East African country Tanzania.

The company has about 100,000 users and has recorded an increase of 200% in transaction volumes.