Juicyway, an African fintech that leverages stablecoin technology to enable fast and cheap cross-border payments, has announced that after processing more than $1 billion in transaction value for thousands of African businesses over the past three years, I'm secretly launching it.
The fintech claims to have processed over 25,000 transactions and generated $1.3 billion in total payment value (TPV) from 4,000 users. These transactions leverage stablecoin technology at their core. According to its founders, the fintech has built up this number without any publicly available apps or marketing efforts.
Instead, the fintech grew organically, acquiring similar businesses with thousands of customers (including Andela, where one of its founders previously worked as an executive) and relying on word-of-mouth referrals.
After three years of operating in stealth and gaining high-profile customers such as corporate Bolt and IHS, it is finally opening its doors to the public. Fintechs such as Piggyvest, Bamboo, and Afriex. energy and logistics company Mocoh SA;
One of the customer types for cross-border payment platforms is remittance businesses, where users in the United States can send money to Nigeria, for example. These companies use Juicyway (a name that doesn't really sound like fintech) to inject liquidity and determine the price at which funds (in this case dollars) are exchanged for Nigerian naira. After conversion, money transfer operators can distribute the converted funds to their customers.
Traditional international and cross-border payment platforms have facilitated such processes for many years. However, a new wave of platforms leveraging stablecoin technology is challenging these traditional methods across developed and emerging markets.
Rather than transferring fiat currency directly, these platforms use cash deposited in U.S. bank accounts to purchase stablecoins such as USDC and USDT on your behalf. These stablecoins are sent to users' digital wallets, where they can either hold their cryptocurrencies or exchange them for local currency, offering a faster, more flexible, and often cheaper alternative. Provide.
As African-born executives at Andela, a global marketplace for technology talent, and Bamboo, one of Africa's largest retail brokerages, Justin Ziegler and Ife Johnson, respectively, are former employers whose previous employers crossed the border. I saw first-hand the challenges faced in moving funds. There are many cross-border solutions on the market.
juicy way
Ziegler said that despite Andela's success and raising hundreds of millions of dollars, getting that money to the continent for operations has proven difficult.
“Even if there were a lot of solutions out there, it didn’t make sense that they didn’t address the problem in a way that Bamboo or Octa could trust,” Johnson, CEO of Juicy Way, added in an interview. Ta.
“On a personal level, I have felt this disparity too. Without access to American banks and platforms like Juicyway, I would not have been able to access the global economy as freely as I am today, born and raised in Africa.” I wouldn't have been able to participate.”
These common grievances gave way to Juicy Way, which its founders say is increasing African participation in the global economy, as Johnson describes it. The platform, which announced a pre-seed round of $3 million, enables individuals and businesses to send, receive, and process payments globally, and supports fiat and cryptocurrency transactions.
Providing liquidity to businesses
Africa's contribution to the $5 trillion global currency market is less than 1%, partly due to the lack of liquidity in intra-African currency pairs. Juicyway provides customers with access to liquidity pools for domestic and international payments and foreign exchange through web and mobile apps and APIs covering currencies such as the Nigerian Naira, US Dollar, Pound Sterling, and Canadian Dollar I will.
Stablecoin platforms display real-time rates based on what others are willing to pay, facilitating a “liquid ecosystem” that reduces transfer costs through competition and transparent pricing. Market-driven pricing is critical to Juicyway's operations in Nigeria's volatile economy. The startup operates Naira Rates, the country's largest naira price discovery engine, which is used by about 500,000 Twitter followers to track foreign exchange rates.
In addition, Juicyway offers multi-currency and insured accounts for transactions facilitated by remittance service partners such as Access Bank in Nigeria. Stablecoin infrastructure startup Bridge, where Stripe is in talks to acquire, move, store and accept stablecoins, and Lead Bank, a leading US fintech partner bank, are in talks to offer virtual dollar accounts to customers I am doing it.
Cryptocurrency and stablecoin technologies offer clear benefits in reducing costs and speeding payments, but such partnerships are required to maintain compliance and manage risk. Therefore, to strengthen compliance, Juicyway has hired Joshua Wasserman, a former FDIC bank examiner and Cash App compliance leader, and collaborated with Sumsub for advanced KYC, KYB, KYT processes and transaction restrictions. created and tracked anomalies in user behavior to prevent fraud. And then there's money laundering, the founders said.
Johnson also said that given the recent Synapse failure, Juicyway understands the risks to its partners as a partner-dependent fintech and is actively talking with other banks and payment processing platforms. .
“One of the ways we have been able to gain an advantage in navigating complex financial operations is by eliminating the role of primary custodian and payment processor by relying on one entity to handle both. However, what I just described is not certain, so we are also diversifying our banking partners and payment processors in these markets,” the CEO said.
Fintech revenue comes from processing and payment fees, with fees ranging from 0.2% to 10% on a given transaction. Going forward, the company aims to generate additional revenue from interest income on customer balances, Johnson said on the conference call.
Two months ago, Yellow Card, a startup that leverages stablecoin technology to help more than 30,000 businesses in Africa and beyond manage payments and finances, raised $33 million from multiple investors including Blockchain Capital. was procured. This is part of a growing wave of startups, including Conduit, applying stablecoin technology to cross-border payments in Africa and other emerging markets. It is unclear whether other players like YC-backed Waza and Verto are using stablecoins. However, because cross-border payments overlap, they end up competing for the same market.
While Johnson sees these startups as partners in the evolving cross-border payments ecosystem, Juicyway is a contrast in its stablecoin orchestration layer, with both the supply and demand sides. We believe that we are focused on meeting customer needs. “Our single biggest north star is increasing Africans' access to the global economy, and that shapes the way we make decisions,” the executive said. “What this means for us is that we are less financially driven and more product-driven and compliance-driven.”
Like other platforms that issue or use stablecoin technology, Juicyway requires a money transfer license to operate given the regulatory ambiguity surrounding the global issuance and use of virtual currencies and stablecoins. (in the company's case, across the US, UK, Canada, and Nigeria). In the coming years, this three-year-old fintech may obtain similar licenses in other African countries, making it easier for Africans and those doing business on the continent to convert African currencies into local currencies. We aim to become a platform where people can exchange money.
Early African investor P1 Ventures led the pre-seed round, with participation from Ventures Platform, Future Africa, Magic Fund, Microtraction, and other angel investors.