Zazuu, the fintech marketplace for cross-border payment networks in Africa that raised over $2 million from investors like Launch Africa and Founders Factory, has shut down after failing to raise funding. “We explored every option before making this decision,” the company said in a LinkedIn post announcing the closure.

Zazuu was founded by Kay Akinwunmi (CEO), Korede Fanilola (COO), Tosin Ekolie (CTO), and Tola Alade (CDO) in 2018 and raised a $200,000 seed round from Launch Africa and ODBA in August 2021. A year later, the company raised $2 million from Launch Africa, Founders Factory Africa, ODBA, HoaQ, Tinie Tempah, Jason Njoku, Babs Ogundeyi, and other angel investors. 

Africa has the highest rate for remittance services for any continent; the average rate for sending money to the continent from Europe hovers around 9% and could be as high as 22% in some instances. Zazuu, which started as a simple Facebook and Telegram chatbot informing users of daily FX rates, evolved into a full-blown aggregator that listed more than 17 Africa-focused remittance providers on its platform before its closure. 

The startup operated on the belief that a marketplace where customers could choose the cheapest remittance option could help lower prices by bringing transparency and increasing competition. Akinwunmi told TechCabal in March 2022 that Zazuu had the lowest rate anyone transferring money to Africa could get on the platform, at 1.5%. The startup also said that almost a hundred thousand users had used its Search and Compare service, which customers used to compare prices to find the best rates for sending money to Africa.

Adewunmi told TechCabal in May 2022 that one of the challenges Zazuu faced in its earlier stages was explaining to customers and potential partners what they were trying to build. He added that another challenge Zazuu faced was licensing requirements and the costs attached to them. 

Zazuu’s shutdown is another in a series of startups shutting down this year as funding dries up for Africa’s tech ecosystem. By the end of October, African startups had raised less than $2.8 billion this year, which represents less than half of the $6 billion raised last year. Lazerpay, a crypto startup that shut down in April, also blamed a lack of funding for its closure. WhereIsMyTransport, a South African mobility startup, also shut down in October, citing an inability to raise new funding. 

Zazuu, a London-based fintech building a marketplace for remittance companies, has announced a $2 million raise. The fundraising round saw participation from Launch Africa, Founders Factory Africa, HoaQ, Tinie Tempah, Jason Njoku, Babs Ogundeyi, and other angel investors. 

Zazuu has since 2020 been providing Africans in the diaspora information about ways to send money to the continent. The company has grown from a simple Facebook and Telegram chatbot informing users of daily rates to an FCA-licensed organisation in the UK, with users in 8 countries.

Speaking on the raise, Kay Akinwunmi, CEO of Zazuu, said, “The mission has always been simple for us from day one. Africans have consistently gotten the shorter end of the stick with remittance transactions. We discovered that the primary reason for that was a lack of transparency on the part of the providers. We’re solving that problem by building a smarter way to transfer money. With Zazuu, users can search multiple money transfer providers in their region, compare the rates and fees, and then choose who to send money with, at no extra cost.”

According to Akinwunmi, this raise will help the company build a better financial ecosystem for Africans in the diaspora. He added: “That means, more than just helping people complete transactions, we want to better help them with better access to financial instruments like credit both home and abroad in the future. The aim is to build a completely non-biased financial well-being for African immigrants across the world.” 

Korede Fanilola, the company’s COO, added that the company is looking to grow and spread their services to other countries in Europe. He said  “The plan for us is growth. We want to scale our solution as quickly as possible. We’re working on getting licenses that allow us to offer our service to users in other European countries before the end of the year. We’ll also be concurrently improving the product with new features that ensure that everyone sending money to Africa gets the best money transfer experience.”

There are 1.7 million Nigerians living outside Nigeria, according to the most recent estimate from the United Nations Department of Economic and Social Affairs (DESA). And according to a World Bank estimate in 2021, remittances to the sub-Saharan region grew by 6.2% to $45 billion. However, these remittance costs are high, averaging around 9% for making a transaction of $200. 

Growing up, Kay Akinwunmi, CEO and co-founder at Zazuu, witnessed his parents struggle with high transaction costs when sending money to Nigeria. As an adult, he would develop a solution to solve this problem. 

On the 9th and final episode of the UK-NigeriaTech Hub-sponsored Building From Ground Up, Akinwunmi spoke to TechCabal’s Senior Editor Kelechi Njoku about how he convinced his partners and co-founders—Korede Fanilola (COO), Tosin Ekolie (CTO), and Tola Alade (CDO)—to join him in building Zazuu, a fintech marketplace for cross-border payment networks where users could send money from the UK and Europe to Africa.

Zazuu, which started as an idea in 2016, aggregates payment vendors in 1 platform so users who want to send money to Africa can choose which vendors they’d prefer to work with, based on the best exchange rate, transfer fee, and user experience.

Adewunmi explained, during the live, that money transfers to Africa are expensive because of an old banking system that requires multi-organisational partnerships for money to be moved. The problem with this, he said, is that each financial partner that facilitates such financial transactions increases the cost of payment, rendering cross-border payments expensive. Zazuu was born out of a desire to reduce the cost of cross-border payments to Africa.

Early-stage partnerships 

Adewunmi explained that one of the challenges Zazuu faced in its earlier stages was explaining to customers  and potential partners what they were trying to build. While he knew he was building a marketplace where financial vendors alongside their rates are featured and made available for users, these financial vendors thought Zazuu was a competitor—even though featuring them on the platform automatically got them more customers, and for free. 

Another challenge Zazuu faced was licensing requirements and the costs attached to them. When Adewunmi applied for a licence with a payment vendor based in Amsterdam, the vendor didn’t initially understand Zazuu’s business model or value proposition, and they went back and forth with this vendor for 8 months without any progress.

“They asked unreasonable questions they probably wouldn’t ask other people—for example, those focusing on European markets. We were classified as a risky entity. We were enabling payments to Africa, and Africa is risky, from a compliance or regulatory standpoint.”

Finding co-founders 

Adewunmi pitched Zazuu to his co-founders in an unusual way, at a house party he had organised. But he admitted that he had done all the due diligence on them, having been friends with them for close to 10 years, and having come to know them professionally as well. In 2014, while each of them ran separate ventures, they had formed a community of young Black Africans in tech where they organised greets and meetups, which helped them learn each other’s skill set, strengths, and weaknesses. 

Adewunmi revealed that after failing multiple times at building startups, he decided, for Zazuu, that he would not be a solo founder; he wanted to avoid errors in his new venture.

Adewunmi admitted that he decided to build with his co-founders because they all had strengths he didn’t have. “But what brought us together was our passion for building for the continent. We were all making good money consulting for different firms, but one thing that was consistent across our friendship is that yearning to build for Africa, to create something that is authentically African and represents African ingenuity and innovation.”

Adewunmi advised founders to do some work on their idea, move past the idea stage, and build at least a prototype before pitching a co-founder. 

Speaking on how founders can get funds in their startup’s early days, Adewunmi revealed that he and his co-founders did not work full time on Zazuu in its earlier days; they built it in their spare time. They paid staff from their personal monies.

Adewunmi encourages founders to prepare themselves for hard times when building by working on their mental and physical health so that they can handle the challenges life throws at them. “The first job of founders is to look after themselves. You should not neglect yourself because, if you do, you will not function well at your job. You have to understand that everything is hard, so you are optimising yourself to withstand the hard times.” 

How would this look when the same model is applied to financial services like payment? Can payment networks be aggregated into one platform for people to compare and then choose a suitable provider? A few years ago, the answer to this would have been no. But, with the increasing need to move money faster across different countries and continents, and the number of available cross-border payment networks, the answer is now yes.

In answering this question, 4 friends—Kay Akinwunmi (CEO), Korede Fanilola (COO),  Tosin Ekolie (CTO), Tola Alade (CDO)—came together to found Zazuu, a fintech marketplace for cross-border payment networks into Africa. It was their way of solving the problem of sending money back home, which has sort of plagued them and their families from childhood. Akinwunmi, especially, who’s originally from Nigeria but has lived in the UK with his family for 18 years, narrated how his mother would journey to Peckham just to send money to Nigeria through an agent because the banks charged a little too much for transfers at the time.

Akinwunmi, who has worked as a software development consultant for 10 years, had the idea for Zazuu in 2016 after running a couple of businesses, including a digital marketing company and a chatbot on the costs of money transfers. Fanilola was a financial analyst who had worked with a couple of firms in the US and UK before Zazuu. Ekolie was one of the early engineers at Checkout.com. He’s also an ex-JP Morgan and ex-Sky employee. Alade, on the other hand, is an award-winning designer. 

Zazuu is a platform aggregating cross-border payment networks for people who want to send money to Africa from the UK and Europe. The platform stands as a recommendation engine for the best money transfer operators (MTOs) and helps users to compare and find the provider with the best rate and customer service.

“The idea is to aggregate all the world-regulated money transfer companies into one place and give customers that greater visibility and seamless experience. At the point of sending money, they can see the best rate and just use a button to move money to wherever they want,” Akinwunmi told TechCabal. “And that process should be instant and a far better experience than they’d get if they go directly to any of these partners.”

According to the World Bank, in 2021, remittances to the sub-Saharan region grew by 6.2% to $45 billion. However, Africa has the highest remittance costs globally, averaging around 9% for making a transaction of $200. 

Zazuu’s overarching mission is to bring down the cost of sending money into Africa by providing its users with the power of choice and always-on accessibility. Its platform shows users which money transfer operators (MTOs) are offering the lowest commissions for money transfers.

“Some MTOs charge between 9–11%,” says Akinwunmi. “We look at the market and find the best providers. We show all the fees and also all the hidden costs. This way, we’re getting the average commission down to under 2% for our users.”

Tractions and growth

According to the startup’s website, users can send money from 8 sending countries including the UK, US, Canada, Belgium, Italy, France, and a few other European countries. On the receiving end, users can receive money in about 11 countries including China, South Africa, Zimbabwe, Uganda, Kenya, and Nigeria, which accounts for the largest international remittance in Africa. 

Zazuu has 17 MTO partners on its platform including some of the biggest MTOs in the world like WorldRemit, Wise, Azimo, Remitly, and Ria. Akinwunmi also mentioned that the company continues to add more countries on both the sending and receiving end of its operations, and more MTOs. 

The company has officially raised up to $800,000 in seed funding from investors like Founders Factory, in partnership with Standard Chartered Bank. According to the CEO, Zazuu has raised more than that, unofficially.

Akinwunmi also mentioned that Zazuu is Financial Conduct Authority (FCA) regulated. FCA is the same license African fintech companies like Flutterwave and Chipper Cash have to be able to operate in the UK and Europe. “FCA is a big deal for us because it will help us expand our operation globally and quickly,” he added.

How powerful could Zazuu get?

It’s somehow obvious that the more the company grows the more its potential for benchmarking how much MTOs charge on transfers becomes clearer. Zazuu is the first marketplace for cross-border payment in the world, and it’s safe to say that the many ways its power can manifest haven’t been fully realised yet. 

But one thing is clear: it will control the rate of cross-border payment in Africa.

“Ten years ago, the World Bank said it wanted to drive the cost of cross-border remittance to below 2%, but that hasn’t materialised till now. Again, in 2019, the bank doubled down on that ambition, but nothing has changed because nobody is enforcing it. It’s just all talk and no action,” said Akinwunmi. 

Akinwunmi said Zazuu has already started influencing cost restructuring. As of the time of the interview, he mentioned that the rate on the platform is at 1.5%—the lowest anyone transferring money to Africa can get. 

But the question is, why is the cost coming down when it’s a free market and Zazuu isn’t setting the price? According to Akinwunmi, when Zazuu soft-launched in 2020, the top MTOs on the platform were unpopular agents while big companies like Azimo and Revolut were nowhere to be found on the ranking table because their rates were sort of high and these small agents had the best rate. 

Now, to stay on top of the game, the big MTOs have to optimise their pricing to gain visibility on Zazuu. This is one of the powers the startup has. It can become the search engine of cross-border payment into Africa, and to rank high, MTOs would have to optimise their brand by offering the best services across board—including rate and transfer time. 

What’s next for Zazuu?

In e-commerce terms, Zazuu can be identified as a “classified marketplace” because it only provides visibility and matching; everything else is done outside its platform. Once a user chooses a provider, they’re redirected to the provider’s web or mobile app. 

But Zazuu wants more.

Apparently the founders have realised the scale of the power they are sitting on and are now ready to optimise and claim it to the fullest. Zazuu wants to scale into a one-stop-shop for cross-border payments; that is, when users come on the platform and choose a provider, they won’t be redirected to the provider’s platform but stay on Zazuu and explore all the functionalities of their chosen provider. 

“What’s about to come is going to be an absolute game changer. We want to enable end-to-end transactions within our platform without users having to leave,” said Akinwunmi. “This is incredible, because right now, most of our customers have 3–5 money transfer apps on their phone, and they have to do KYC and identity verification and anti-money laundering checks for all of these different apps. But, now, they’ll have to only deal with Zazuu.”

Zazuu also wants to leverage the global increased demand for freelancers and globally distributed workforce to introduce its services to businesses that have employees or partners they need to pay in Africa. 

This is not the first time Africa would experience a fintech marketplace: There was EvolveCredit which aggregated digital lending apps in Nigeria for users to compare and pick the one they wish to take a loan from, right from its platform. But has now become a credit infrastructure and profiling APIs for Africa. However, this is the first time in the world that a company is aggregating not just payment networks but cross-border payment networks. Akinwunmi believes that, soon, more companies with this same business model would spring up. But before then, they are focused on building and improving their products to create a seamless experience for their users.