CrowdForce secures $3.6m to expand financial inclusion across Nigeria
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CrowdForce, a Nigerian fintech agent distribution platform, has raised a $3.6 million pre Series-A investment aimed at addressing challenges hindering financial services availability by deepening its financial service offerings to unbanked and underbanked communities.
The equity and debt round was led by private equity firm, Aruwa Capital Management, with participation from HAVAÍC and AAIC.
CrowdForce in a statement disclosed that the capital will be partly employed in expanding its team, geographical operations and marketing.
The startup, which has partnered with 19,000 fuel stations, 20,000 resellers and 7,000 pharmacies to broaden its distribution network, also disclosed plans to increase its 7,000-strong active agent network three-fold this year by distributing more point of sale terminals to small businesses and aggregators in the next 12 to 18 months, in its effort to provide financial services within one kilometre, or within 15 minutes duration of all Nigerians.
In addition, CrowdForce said it would create an innovative banking method by partnering with larger traditional businesses such as petrol stations, and turning them into mobile bank branches that offer float services while storing their cash on its PayForce digital wallet.
It explained that this will save agents the trouble of having to travel distances to the bank in a bid to refinance their working capital.
Oluwatomi Ayorinde, CrowdForce’s chief executive and co-founder, commenting on the investment, emphasised a clear need to build an offline distribution network to enable fintechs and challengers to reach the mass market.
“This is exactly what we’re doing at CrowdForce; and this round will accelerate our momentum even more,” he added.
According to him, despite the fact that fintechs and challenger banks are emerging in Africa to deliver better financial services via digital rail, physical cash transactions still dominate Nigeria’s financial space as 97 percent of retail transactions happen offline.
He added that CrowdForce has been cash positive since 2020 and served 1.9 million unique customers in 25 Nigerian states to date, while the startup’s user growth has increased 25 percent month-on-month.
On the uniqueness of CrowdForce’s services, Ayorinde said; “These stations (petrol stations) collect cash from their sales of petrol daily. But now, we can leverage that liquidity, turn them to mobile ATMs that can then provide liquidity either to customers or to other mini agency banking outlets.
So if you run an agent network and run out of cash, you don’t necessarily need only a bank branch. You can look for a petrol station nearby and replenish cash flow.”
Adesuwa Okunbo Rhodes, Aruwa Capital founder and managing partner, expressed excitement over leading CrowdForce investment, emphasising that the platform provides significant value by providing access to critical financial services in rural areas that have been overlooked by traditional financial institutions.
“CrowdForce is actively deepening financial inclusion through its products and services, and has unique competitive advantages through its proprietary technology and extensive agent distribution network across the country,” she added.