Waza, a payment and liquidity platform backed by Y-Combinator, has burst into the scene with $8 million in seed money. This startup claims to make it easier for African businesses and traders to manage and pay their supplies on a global scale. The company is targeting a $7 trillion market that has the potential to generate #250 billion in revenue.
The startup facilitates business payments and liquidity management across six continents for hundreds of clients, cutting across three categories with different needs. The first category involves multinational organizations like US-headquartered airlines that operate locally in Africa with liquidity problems. In the second category are importers and traders that transact with suppliers from countries like India, China and the U.K. The third group are fintechs and developers looking to build their cross-border payment solutions.
Cross-border fintech and payments is becoming a golden goose in the African market. This is particularly so for Y-Combinator-backed startups in the last batches. The market, projected to surpass $250 trillion by 2027, is seeing fintechs increasingly challenging traditional banks, especially in the B2B sector.
Waza, after kicking off its operations in January 2023 after participating in Y Combinator’s winter batch that month, will aim to capitalize on this trend and make its mark in the global payments market, starting with Africa.
In its first month, Waza’s total payment volume amounted to $280,000, according to co-founder and CEO Maxwell Obi. The CEO also said that Waza’s transaction volumes and revenues, which come from FX spread and a 0.75% to 1% take rate, are growing by an average of 20% monthly.
While not revealing specifics, Obi hinted at the possibility of Waza developing a banking product for businesses, similar to Brex or Mercury for Africa. This will include credit or financing or a stablecoin banking product for the digital economy.
Obi founded Waza with CTO Emmanuel Igbodudu, a senior engineer at Revolut who led the Vaults team. Igbodudu also worked at Carbon and held engineering roles at prominent Nigerian fintechs like Moniepoint and FairMoney. Before founding Waza, Obi held various roles as a founder and operator. He co-founded Amplify, a Nigerian fintech acquired by Carbon, where he worked briefly. Afterward, he joined Zepz subsidiary Sendwave.
Both founders have strong technical backgrounds, which will be valuable as the fintech expands into other trade finance and cross-border payment solutions to diversify its revenue streams.
The seed investment will fund these initiatives and expand into new markets beyond its current operations in Ghana and Nigeria. The round includes $3 million in equity from Y Combinator, Byld Ventures, Norrsken Africa, Heirloom VC, Plug and Play Tech Center, and Olive Tree Capital. Lagos and New York-based Timon Capital provided $5 million in venture debt financing, money that Waza will use to pilot trade financing for its large enterprise clients.
