As the CEO of Makeba, a money transfer startup, Yamandou Alexander appreciates a paradox about his slice of the global financial technology industry.
While sending money online to friends and family abroad has never been easier thanks to fintech, building a business to do it in African countries that lack such services can be very difficult.
The strain of creating a remittance business, on a scale of 1 to 10, is “an 11,” Alexander said in an interview with CQ Roll Call. He’s running into preconceived notions about doing business in Africa and how to address concerns such as money laundering. To keep New York-based Makeba afloat, Alexander, 47, took $500,000 out of his own savings.
His struggles contrast starkly with companies working in countries with more advanced payment systems. Ant Group, a Chinese fintech firm, is poised to raise as much as $34 billion in an initial public offering, the largest ever if it succeeds. Last week, U.S. payments firm Melio raised $80 million in private funding.
Makeba is concentrating on remittances that cross international borders, which have been slower to develop than other areas of fintech. Chris McCann, a general partner at Race Capital, a venture firm, last year wrote that “very few remittance startups have broken out,” even as the world demands faster and cheaper payments.
Sherwood Neiss, partner at Crowdfund Capital Advisors, which tracks the federal crowdfunding program, said few remittance businesses have tried to raise money through the program, which allows startups $1.07 million in fundraising per year. Makeba is one of them.