Mono, a startup that wants to build Plaid for Africa, receives support from Y Combinator

by MMC
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Image credits: Mono

Prakhar Singh and former Paystack employee Abdoul Hassan have known each other for seven years, creating different technological products individually and collectively along the way.

Before joining Payroll stack in 2018, Hassan co-founded payments startup OyaPay the previous year. After leaving the Stripe-owned company in 2019, he launched a data startup called Voyance where Singh, who had already abandoned one of his products — Transferpay.ngan offline payments startup – was a software engineer.

Last June, the duo began working on Monoa project that would allow companies to access the financial accounts of their customers in Nigeria.

By streamlining various data into a single API, businesses and third-party developers can retrieve vital information such as account statements, real-time balance, transaction history, income, expenses and owner identification Account. Of course, this is not done without users’ consent, as they must log in with their internet or mobile login credentials before any transaction.

After a series of tests and iterations, Mono launched its beta version in August, with Hassan as CEO and Singh as CTO. A month later, the startup closed a $500,000 pre-seed investment from early-stage investors like Side marquee, Business Platform, Palme d’Or Investments And Rally cap. This was one of the most notable pre-seed rounds on the continent due to the time it took from launch to funding, a characteristic shared by other API fintech startups in the region, although with much longer delays.

In a region where more than half of the population is either unbanked or underbanked, these open finance players are trying to improve financial inclusion on the continent. Open finance thrives on the idea that with access to a financial ecosystem through open APIs and new avenues for moving money, accessing financial information and making borrowing decisions, the barriers and Entry costs for the unbanked and underbanked could decrease.

However, for Hassan, Mono’s piece straddles open finance and open banking. Although both terminologies describe what these African startups want to achieve, the CEO believes that they are subject to regulation by the government and major financial institutions. Mono is a data company operating in the fintech space, he says.

Prakhar Singh (CTO) and Abdul Hassan (CEO). Image credits: Mono

He compared Mono to how Google was in its early days when it started with a simple mission: to organize the world’s information and make it accessible. Decades later, Google has transformed into an Internet giant operating in a multitude of sectors.

“If you ask me, I will say we don’t see ourselves entirely in open banking or open finance,” he told TechCrunch. “Today we are concerned with how we can get data from different sources and aggregate it into a database that companies can access with the consent of our users. Ultimately, we can use this data for different use cases and solve various problems.

Mono has already partnered with over 16 financial institutions in Nigeria and has just over a hundred companies like Carbon, Renmoney, Flutterwave and Indicina using its platform. They process around 5 million data sets per hour, the CEO claims.

These clients are primarily lending companies, with a few others in the proptech and healthtech fields, which allow users to pay for their services in installments. But there are plans to diversify this clientele. One of these ways will be to improve onboarding processes on apps through its one-click signup feature.

From a user perspective, here’s how it works when considering two savings apps: Users submit their KYC to the first savings app. But for one reason or another, perhaps due to a better interest rate, some users are switching to a second savings app.

However, there is a small problem in that a second KYC is required for this process. What Mono did with the one-click sign-up feature was allow users to transfer their data from the first app to the second without repeating the process. And to this end, Mono has partnered with two of Nigeria’s leading savings and investment platforms to roll out the service.

“First, we have given businesses new infrastructure that allows them to access customers’ financial accounts and understand their history before providing them with loans or any other financial services. Today, we believe that with the new generation of companies arriving in Africa, Mono will be the one to drive their onboarding processes,” notes Hassan about the platform’s offerings.

Image credits: Mono

For any investor, Mono’s attractive features, coupled with explosive growth, seem like too good an opportunity to pass up. Today, the six-month-old startup announced that it had been accepted into Y Combinator’s Winter 2021 batch. He will receive $125,000 in seed funding with the possibility of receiving a follow-on investment after graduating in March. The startup joins 39 other African startups according to YC data passed through the accelerator since 2009.

Entering the Accelerator helps Mono address one of its biggest challenges. According to Hassan, Mono has encountered users who are still skeptical about entering their internet banking information on the platform due to their personal experiences with online fraud in the country.

“So far we’ve been focused on building, and I think we’ve gotten to a point where we’re seeing some people don’t want to use their online banking on Mono.” But with YC’s support and a conscious offline marketing plan afterward, the founder believes Mono’s credibility can be boosted.

At Paystack, where Hassan was a product manager, he had the privilege of experiencing first-hand the company’s innovation and growth. before its acquisition by Stripe last year. He says he learned the ropes of product development and management, as well as recruiting – lessons that stuck with him at Mono, a company that now has 13 employees across Nigeria and India.

Mono’s plan is to become a global company, and entering YC provides the perfect opportunity to do just that. The company is also planning imminent pan-African expansions into Ghana and Kenya and, in all likelihood, Mono could achieve one or both of these before the end of the first quarter. Building the business for expansion and the hiring frenzy that comes with it will require capital, so a seed round is underway to smooth the entire process.

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