Zazuu, UK-based African-focused Fintech, Raises $2m to Scale Cross-border Operation

Zazuu, a U.K.-based fintech that offers customers various remittance options, has announced that it has raised $2 million in a new venture round.

The African-focused payment startup was developed in 2018 to fill a gap in cross-border remittance affecting mostly migrants living in the US and the UK. It has grown to attract investors who are willing to bet big on its growth potential.

The round received participation from pan-African investors Launch Africa and Founders Factory Africa, Hoaq Club, ODBA VC, Jonomi Ventures, British rapper Tinie Tempah, iROKOtv founder and CEO Jason Njoku and Kuda chief executive Babs Ogundeyi.

The Zazuu idea was born when the founder and CEO Kay Akinwunmi  and his cofounders, Korede Fanilola, Tola Alade and Tosin Ekolie had firsthand experience what the majority of Africans in the US and UK go through while trying to send money back home.

As noted by TechCrunch, financial systems in the U.S. and the U.K. do not favour migrants, particularly African ones. For many, performing certain financial activities like building one’s credit history or sending money back home can be difficult.

“We’ve experienced this. Seeing my mom send money and the friction there is pretty much the story of millions of Africans and migrants sending money,” said Akinwunmi. “Africans in the diaspora, whether you’re sending money to another side of the world or trying to get a loan here in the U.K., are at a disadvantage.”

Zazuu started off as a chatbot in 2020, publishing via Facebook and Telegram, remittance rate and fees from different remittance platforms such as WorldRemit, Chipper Cash, Nala and Western Union.

“We looked at the typical African customer to understand their behavior, and we noticed a fascinating trend,” Akinwunmi told TechCrunch. “We realized that Africans have this pathological behavior, which is, we love to shop around, to compare our choices and try different options before we finally make a decision.”

In further conversation with TechCrunch, the CEO said among other things, that the initial product helped dispel customers’ preconceived notions about which service had the best rates as they got introduced to new providers. The product has now evolved into a full-blown aggregator with more than 17 service providers (money transfer companies that serve multiple corridors) listed. It provides options for money transfers from Canada, the U.S. and seven European countries, including the U.K., letting customers use its “Search and Compare” service and find providers that can move money from these countries to Africa.

“The core of Zazuu is to take power away from financial institutions and money transfer companies, which are inherently biased. We want to give customers this bird’s eye and transparent view so that for the first time, they can see all of the options in one place, including rates, speed and reviews. The onboarding experience is going to be a lot smoother and much better for them,” he said, comparing Zazuu’s processes to traditional market players.

Zazuu’s proposition is clear to customers; however, it can be tough to see what’s in it for providers on the platform. But Akinwunmi argues that his platform solves providers’ most significant pain points: churn and high customer acquisition costs. “Zazuu is a marketplace, and the reality is customers are shopping around looking for multiple entities to send money. But it is an opportunity for providers to reinforce their brand message or advertise other parts of their business aside from good rates. And as opposed to getting just a referral, we’re bringing real transactional value to them,” he expressed.

While Zazuu didn’t provide hard user numbers, it said this base has grown 2.3x in Q1 2022 compared to the entire 2021. The company will use the new investment to keep these numbers up, hire more talent and scale its Pay with Zazuu feature that allows users to complete transactions in-app. Although this service is only available to senders in the U.K. and receivers in Nigeria and Ghana, Zazuu says it plans to expand access to other sender and receiver countries. Also in the works are a couple of products that address financial challenges African immigrants face, such as access to credit.

“The aim is to build a completely non-biased financial wellbeing for African immigrants across the world,” said the chief executive.

Commenting on why Launch Africa invested in the four-year-old company, Zach George, the firm’s managing partner, said, “Zazuu is building a true marketplace for financial services, starting with remittances and payments. We believe their business will bring fairer, more transparent pricing and better cross-border mobility of money across the African continent.”