Latin American B2B Paytech Conduit Raises $6M to Expand Services to Africa

Conduit, a Latin American B2B payment platform has raised $6 million in funding led by Helios Digital Ventures to expand into Africa.

In August 2023, Conduit launched its B2B cross-border payments platform for businesses in Latin America, recognizing the significant challenges businesses in countries like Colombia, Brazil, and Mexico face when trying to connect to the global financial system. Many of these businesses struggle with access to dollars, reliable SWIFT connections, and other essential payment rails.

The situation is similar in Africa, where businesses in countries like Kenya and Nigeria also encounter these difficulties. Following the launch of its platform, Conduit enables businesses to perform cross-border transactions in US dollars via ACH or SWIFT, regardless of whether they have a U.S. entity.

For years, most businesses have relied on traditional banks, but high costs and slow processes are pushing some to adopt fintech solutions that promise lower costs and fast settlements. In a bid to solve this challenge Conduit, pivoted from crypto to traditional banking to bridge traditional finance with decentralized finance (DeFi). The fintech backed then by $17 million in seed funding from investors developed analytics tools for institutional investors in DeFi.

The fintech expansion into Africa follows the platform’s strategic shift away from crypto-backed products towards traditional banking services, a change that has garnered significant traction in markets that struggle with accessible payment infrastructures.

“We identified this as a much more pressing and tangible pain point than the bubble of decentralized finance. These are real-world issues faced by traditional businesses that need a better, faster, and more transparent way to transact with their suppliers and partners across borders,” Co-founder and CEO Krill Gertman remarked.

Despite the promise of DeFi and stablecoins like USDC or USDT, the practical challenges remain significant. Most businesses still need to convert stablecoins into local currencies to manage rent, salaries, and other operational costs. While Conduit still helps bridge this gap by facilitating these conversions, allowing businesses to off-ramp stablecoins into local currencies where needed, Gertman noted that Conduit is now much closer to a traditional fintech.

He further states that since the pivot, Conduit’s annualized transaction volume has surged from a few hundred million dollars to over $5 billion. Of this, 20% comes from businesses in Kenya and Nigeria, where the startup began its expansion last December. The platform is also experiencing a 25% month-on-month revenue increase across both regions, partly driven by transaction fees.

“We see even greater potential in Africa, with impressive early growth and volumes we think might surpass Latin America by early next year. However, Africa’s local currencies are much more fragmented, and the connections between these currencies are often more complex. It’s interesting because even though these challenges are prominent, it also presents potentially even bigger opportunities”, the CEO stated.

Conduit’s expansion in Africa is being spearheaded by Eric Wainaina, the former director of The Kenyan Wall Street. He will manage the fintech’s operations in the region, with plans to further expand into other African countries such as Ghana and South Africa. In these markets, Conduit will compete with established players like Aza Finance, Verto, and Waza, offering businesses a more streamlined and cost-effective way to manage their cross-border transactions.