VertoFX, a Nigerian fintech startup, has raised $10 million in a Series A round of funding, two years after it raised $2.1 million in seed funding.
The fund was led by leading fintech investor Quona Capital. Participating investors are the Treasury, Middle East Venture Partners (MEVP), TMT Investments, Unicorn Growth Capital, Zrosk Investments and P1 Ventures. Previous investors include Y Combinator, Accelerated Digital Ventures, and Ace & Company.
With the newly raised fund, the startup has joined the growing number of fintech startups in Africa, attracting lucrative investments from around the world. Nigeria, South Africa and Kenya lead the pack, but others like Egypt have been remarkably securing investments recently.
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VertoFX which focuses on businesses in emerging markets, will use the investment to continue building its platform to enable businesses to facilitate swift cross-border payments, solving important pain points in the B2B global payments industry, which is expected to grow to nearly USD 200 trillion by 2028, over six times the size of the retail payments market.
The company also plans to accelerate its geographical expansion into emerging markets such as Africa, a region where SMEs cross-border payment needs are currently significantly under-addressed.
VertoFX’s fast and frictionless global payments platform uses its “marketplace” solution to match businesses efficiently, especially where one of the currency pairs is an illiquid currency.
“Using Verto’s three main products (Payments, Exchange & Multi-Currency account), business owners can now send cross-border B2B payments at FX rates up to 9 times cheaper than they could through traditional banks, and with Verto wallets businesses can hold money with us in 39 currencies and make instant cross-border payments to other companies on the VertoFX network in real-time,” said Ola Oyetayo, co-founder and CEO of VertoFX.
VertoFX was launched in 2018 by Nigerians, Ola Oyetayo and Anthony Oduwole. In their previous experience at top-tier UK banks, the two saw firsthand that while trade and supply chains are increasingly global, international payments remain a complicated and expensive proposition, especially in emerging markets where local currencies are less familiar and less liquid than those of more developed economies.
And while the proliferation of peer-to-peer and remittance companies have started to address this pain point for consumers in emerging markets, the B2B market—which serves the SME sector and accounts for nearly 30% of global imports and 45% of total employment in emerging markets—has remained largely untouched.
Anthony Oduwole, the company’s co-founder and CTO Said while traditional peer-to-peer payment platforms often have transaction limits, the VertoFX platform facilitates payment volumes that are appropriate for MSMEs.
“We plan to expand our presence in emerging markets with this fund through a suite of top-class tech stacks. Geographically, this is an essential step towards our mission of making international payments simple, fast and cheap.
“Our purposefully built tech infrastructure and payment rails enable instant cross-border payments in a way that is really exciting for businesses,” he said.
Monica Brand Engel, co-founder and Managing Partner at Quona Capital, said the vacuum in international payments, immobilizing growth for SMEs, presents VertoFX with the opportunity to offer innovative solutions.
“Low visibility and traceability, slow speeds and the high costs of cross-border payments all inhibit SME growth across global and emerging markets.
“VertoFX’s innovative platform addresses these pain points, removing friction to make international payments fast, simple, and reliable—a key component of SME growth. We are proud to support VertoFX in this important and impactful work,” she said.
VertoFX is carving out a niche in the fintech market, targeting SMEs to drive a B2B-focused payment system. Raising additional $10 million two years after its seed fund shows the startup has amazing growth potential.