Conduit, a rapidly growing cross-border payments platform, has announced a significant milestone in its journey towards global expansion. The company recently secured $6.5 million in funding from Helios Digital Ventures, a leading African-focused investment firm. This new capital injection is set to fuel Conduit’s ambitious plans to scale its operations across Africa, a market ripe with untapped potential for digital financial services.

A Strategic Shift: From Cryptocurrencies to B2B Payments

Founded in 2021 by Kirill Gertman and Michael Gregson, Conduit initially positioned itself as a bridge between cryptocurrencies and neobanks, catering to the growing demand for digital financial services. However, the volatile nature of the cryptocurrency market, exacerbated by the 2022 downturn, prompted Conduit to pivot its business model. In August 2023, the company strategically shifted its focus towards the B2B (business-to-business) payments sector, a move that has since paid dividends.

The decision to enter the B2B space was driven by the recognition of a critical gap in the market—traditional businesses across the globe, particularly in emerging markets, were struggling with inefficient, costly, and slow cross-border payment systems. Conduit’s platform offers a solution by enabling businesses to make payments in U.S. dollars directly to bank accounts via Automated Clearing House (ACH) or SWIFT transfers, even without a U.S. entity. This not only simplifies the transaction process but also significantly reduces associated costs, making it an attractive proposition for businesses involved in international trade.

Helios Investment: A Vote of Confidence in Conduit’s Vision

The $6.5 million investment from Helios Digital Ventures marks a pivotal moment for Conduit, underscoring the confidence that investors have in the company’s vision and growth potential. Helios, known for its focus on high-growth technology companies in Africa, has a track record of identifying and supporting innovative ventures that have the potential to transform industries. With this latest investment, Helios aims to leverage its extensive network and expertise in the African market to help Conduit accelerate its expansion plans.

According to Kirill Gertman, CEO and co-founder of Conduit, the partnership with Helios is a strategic one, designed to enhance the company’s ability to capture the burgeoning opportunities in Africa. “We see even greater potential in Africa, with impressive early growth and volumes we think might surpass Latin America by early next year,” Gertman told TechCrunch. “This investment is a testament to the vast market opportunity across both regions, and we’re excited to work with Helios to drive our mission forward.”

The Appointment of Eric Wainaina: Leading the Charge in Africa

As part of its expansion strategy, Conduit has appointed Eric Wainaina, a seasoned fintech executive, to head its African operations. Wainaina, who brings a wealth of experience in the financial technology sector, is tasked with overseeing Conduit’s growth across the continent. His deep understanding of the African market, coupled with his proven track record in scaling fintech businesses, makes him the ideal candidate to lead Conduit’s efforts in Africa.

Wainaina’s appointment is a clear indication of Conduit’s commitment to the African market. Under his leadership, the company aims to build a robust presence across key markets, including Nigeria, Kenya, South Africa, and Egypt. These countries are not only the largest economies in Africa but also represent some of the most dynamic and rapidly growing fintech ecosystems on the continent.

Africa: The Next Frontier for Digital Payments

Africa has long been recognized as a frontier market for digital financial services, with its large unbanked population and high mobile phone penetration presenting unique opportunities for fintech companies. The continent’s financial landscape is characterized by a reliance on informal financial systems, limited access to traditional banking services, and a growing demand for more efficient and cost-effective payment solutions. Conduit aims to address these challenges by offering a platform that enables businesses to seamlessly transact across borders, thereby facilitating trade and economic growth.

The potential for growth in Africa’s digital payments sector is immense. According to a report by McKinsey & Company, Africa’s fintech sector is expected to grow at a compound annual growth rate (CAGR) of 10% over the next five years, with revenue projections reaching $30 billion by 2025. This growth is being driven by several factors, including the increasing adoption of mobile money, the rise of e-commerce, and the expansion of digital infrastructure across the continent.

Conduit’s entry into the African market comes at a time when cross-border payments are becoming increasingly important for businesses operating in the region. With the African Continental Free Trade Area (AfCFTA) set to boost intra-African trade, there is a growing need for efficient payment systems that can facilitate transactions across different countries and currencies. Conduit’s platform is well-positioned to meet this need, offering a solution that is both scalable and adaptable to the diverse requirements of businesses in Africa.

A Competitive Landscape: Conduit’s Edge in Africa

While the opportunity in Africa is vast, Conduit faces competition from both established players and emerging fintech companies. The cross-border payments space in Africa is currently dominated by a few key players, including Flutterwave, MFS Africa, and Chipper Cash, all of which have made significant inroads into the market. However, Conduit’s unique value proposition—its focus on B2B payments and its ability to facilitate transactions in U.S. dollars without the need for a U.S. entity—gives it a competitive edge.

In addition, Conduit’s platform is designed to be highly flexible and customizable, allowing it to cater to the specific needs of different industries and businesses. For instance, the platform can be used by import and export businesses, payroll services, and other cross-border platforms, all of which require reliable and cost-effective payment solutions. This versatility has already attracted over 50 direct clients, and Conduit is poised to expand its client base as it continues to grow its presence in Africa.

The Road Ahead: Scaling Operations and Expanding Market Reach

With the backing of Helios Digital Ventures and the leadership of Eric Wainaina, Conduit is now focused on scaling its operations and expanding its market reach in Africa. The company has set ambitious targets for the coming years, aiming to surpass its success in Latin America and become a dominant player in the African cross-border payments space.

One of the key areas of focus for Conduit will be to enhance its product offerings and develop new features that cater to the evolving needs of businesses in Africa. This includes the introduction of new payment methods, integration with local banking systems, and the development of partnerships with other fintech companies and financial institutions. By continually innovating and adapting to the market, Conduit aims to stay ahead of the competition and solidify its position as a leader in the digital payments industry.

In addition to expanding its product offerings, Conduit is also looking to establish a strong network of partners and collaborators across the continent. This includes working with local regulators, industry associations, and other stakeholders to ensure that its platform is compliant with local laws and regulations. By building strong relationships with key players in the market, Conduit hopes to create a supportive ecosystem that will enable it to thrive in the long term.

The Global Perspective: A Rising Force in the Fintech World

While Africa is a key focus for Conduit, the company’s ambitions extend beyond the continent. With a strong presence in Latin America and plans to enter other emerging markets, Conduit is positioning itself as a global leader in the cross-border payments industry. The company’s platform is already being used by businesses in multiple regions, and its annual transaction value has risen to over $5 billion, with 20% of this figure emanating from businesses located in Nigeria and Kenya.

Conduit’s success in these markets is a testament to the effectiveness of its business model and the growing demand for efficient cross-border payment solutions. As the company continues to expand its operations and enter new markets, it is well on its way to becoming a major player in the global fintech landscape.

Conclusion: Conduit’s Path to Success in Africa and Beyond

Conduit’s recent $6.5 million investment from Helios Digital Ventures and the appointment of Eric Wainaina to lead its African expansion mark significant milestones in the company’s growth journey. With a strategic focus on B2B payments and a commitment to innovation, Conduit is well-positioned to capitalize on the opportunities in Africa’s burgeoning digital payments sector.

As the company scales its operations and expands its market reach, it will need to navigate a competitive landscape and address the unique challenges of operating in diverse and rapidly evolving markets. However, with the backing of a strong investor base, a clear strategic vision, and a dedicated leadership team, Conduit is poised for success in Africa and beyond.

In a world where cross-border payments are becoming increasingly critical to global trade and commerce, Conduit’s platform offers a much-needed solution for businesses looking to streamline their operations and reduce costs. As the company continues to grow and innovate, it is set to play a key role in shaping the future of digital payments in Africa and around the world.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

13th August, 2024