5 minutes, 5 seconds

28 October 2021

Hello Nigeria! and the Financial Graph

by Kiaan Pillay, CEO

Stitch bank payments pay-ins payouts Nigeria South Africa

We started our journey by providing fintech companies with access to financial account data, and, over the past seven months, we’ve grown our API volumes by over 40% month-on-month. We’ve since extended our mandate to also provide Account to Account (A2A) payments, and our platform will soon facilitate $10M in monthly transfers.

Today, we’re thrilled to announce our launch in a new market – Nigeria!

Our mission has always been to make it easier for businesses and developers in Africa to build and scale innovative fintech products. The first step toward this mission began on our home turf of South Africa. We’re pretty excited to have assisted in the growth of some leading African fintechs, including Paystack, Yoco and Chipper Cash. We’re also inspired by the number of new developers and startups in South Africa, who are building for the very first time and whom we’ve enabled to successfully launch and grow their products.

We’re witnessing the breadth and innovation of products being adopted in the data and payments sector across the continent, and we couldn’t be more excited about their potential impact on the future of African fintech.
“Digital literacy and smartphone ownership on the continent are on the rise, unlocking market potential. There are also rapidly growing developer communities that have the potential to overcome these barriers and are increasingly attracted to high-growth fintechs.”

Why Africa, why now?

Through our APIs, we aim to dramatically reduce the challenges that come with building across African geographies. Across the inherent cultural, political, and economic differences that emerge from 54 countries, we’ve set out to prove that diversity should not come at the cost of scalability. We enable businesses to seamlessly integrate what we call financial building blocks – the elements needed to provide different financial services, such as the ability to perform identity verification and demonstrate bank account or business ownership, or the ability to seamlessly accept payments. We believe that if we can achieve this, we can unlock massive value that will contribute to the growth of Africa’s economies as a whole.

Why has this not been done before? The answer involves both timing and macro-economic factors.

In 2010, a small company called Stripe was founded. It would quickly grow to become one of the dominant forces in payments processing in developed markets. A few years later, another company called Plaid, focusing on data APIs for banking and investments, would quickly become a household name in the US.

These two companies invested a lot in product discovery, education, and market-building. They also started in a country with a huge internal market that can enable scale with relatively few regulatory barriers to overcome once launched, providing them with a lot of headroom for growth without requiring them to broaden their respective mandates or geographies early on.

In Africa, by contrast, it is far more difficult for companies to achieve such rapid scale. Chronic under-investment in essentials such as developer training and infrastructure has impeded the fast growth of a formidable fintech ecosystem – not to mention the challenge entrepreneurs face in navigating the regulatory landscape in each new market.

However, digital literacy and smartphone ownership on the continent are on the rise, unlocking market potential. There are also rapidly growing developer communities that have the potential to overcome these barriers and are increasingly attracted to high-growth fintechs. These are young communities: the average experience level of developers in South Africa is 7.3 years; Nigeria 5.5 years; Egypt 4.1 years; Kenya 3.8 years; and Morocco 3.8 years.

Fortunately, these African developers are scrappy masters of technological leapfrog. We can dissect companies’ product strategies and designs, keeping what works and throwing out what doesn’t. Since our founding, we’ve believed that if we cannot politically achieve a common market like the EU or the USA, we can at least patch together a semblance of one —the concept that inspired our name, Stitch.

Introducing the Financial Graph

We believe the fragmentation of the continent makes Africa ideal for a product tackling what we call the financial graph: an infrastructure for financial building blocks that can interoperate across regions, providers, banks, and other types of financial accounts, allowing businesses to write code once, launch in multiple markets, and scale more quickly.

We see the financial graph as analogous to the social graph, a concept that saw Facebook rise to a $600B valuation. We believe there is a lot of value that can be captured not just from the nodes of financial networks, but also their connective tissue. To encompass the growing complexity inherent in the work we do, we invested early in scalable infrastructure such as GraphQL, a technology developed by Facebook to power the demanding needs of their social graph.

Our goal is to build the infrastructure, developer experience, and core functionality for the financial graph, but we know we can’t do it alone. Stitching it together will require solid partners, as well as a strong understanding of local markets and regulatory environments.

Getting this right could unlock enormous opportunities for fintech innovators, and act as a catalyst for delivering richer value-added services.

So, what’s next?

We are excited to announce our launch in Nigeria! Nigeria is not only one of the most populous countries globally, but it is arguably one of the densest and fastest-growing fintech ecosystems. It is quickly becoming a hub for engineering and product talent and a must-have market for fintechs.

The customer segment in Nigeria is also increasingly compelling. You have a fintech ecosystem that not only comes with larger and established fintechs — where it feels like unicorns are being minted on an ever-increasing basis — but the rate of new fintechs created is growing almost daily.

We couldn’t be more excited to support the Nigerian fintech ecosystem, as well as pan-African startups looking to connect the nodes between other African markets and Nigeria.

The one and only Benjamin Dada has joined us as our Nigeria Country Manager as we kick off in this new market, and we’ll be rapidly hiring more boots on the ground soon.

See you all in Nigeria!

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