This stealthy African stablecoin startup already processed over $1B in cross-border payments
Tage Kene-Okafor
6 min read
Juicyway, an African fintech that leverages stablecoin technology to power fast and cheap cross-border payments, is launching out of stealth after processing over $1 billion in transaction volume for thousands of African businesses over the last three years.
The fintech claims to have processed over 25,000 transactions, generating $1.3 billion in total payment volume (TPV) from 4,000 users. These transactions are powered by stablecoin technology at their core. According to its founders, the fintech racked up these numbers with no publicly available app or marketing efforts.
Instead, the fintech grew organically, acquiring a similar business with thousands of customers (including Andela, where one of its founders previously worked as an executive) and relying on word-of-mouth referrals.
It’s only now launching publicly after operating in stealth for three years and acquiring prominent customers such as corporates Bolt, IHS; fintechs like Piggyvest, Bamboo, and Afriex; and energy and logistics company Mocoh SA.
One customer type for a cross-border payments platform would be a remittance business that allows users in, say, the U.S. to send money to Nigeria. Such a business uses Juicyway (a not-very-fintech name for a fintech) to inject liquidity and decide the prices at which it wants to exchange its funds, in this case, dollars, for Nigerian naira. After the conversion, the remittance business can distribute the converted funds to its customers.
Traditional international and cross-border payments platforms have facilitated such a process for years. However, a new wave of platforms powered by stablecoin technology is challenging these conventional methods across developed and emerging markets.
Rather than directly transferring fiat currencies, these platforms use cash deposited in U.S. bank accounts to purchase stablecoins like USDC or USDT on behalf of users. These stablecoins are then sent to users’ digital wallets, where they can either hold the cryptocurrency or exchange it for their local currency, offering a faster, more flexible, and often cheaper alternative.
As executives at Andela, an African-born but global marketplace for technical talent, and Bamboo, one of Africa’s largest retail stock brokerages, Justin Ziegler and Ife Johnson, respectively, saw firsthand the challenges their former employers faced when moving money across borders despite the numerous cross-border solutions in the market.
Image Credits:Juicyway
Ziegler shared that despite Andela’s success and raising hundreds of millions of dollars, bringing those funds into the continent for operations proved tricky.
“It didn't make sense that even though loads of solutions existed, they didn’t hit at the problem in a way that a Bamboo or Octa could trust,” added Johnson (Juicyway's CEO) in an interview.
“On a personal level, I’ve also felt this disparity. Without access to American banking or platforms like Juicyway, as someone born and raised in Africa, I wouldn’t be able to participate in the global economy, you know, as free as I currently do.”
These shared frustrations gave way to Juicyway, which the founders say is doing, as Johnson describes, "increasing African participation in the global economy." The platform, announcing a $3 million pre-seed round, allows individuals and businesses to send, receive, and process payments globally, supporting fiat currencies and cryptocurrency transactions.
Providing liquidity to businesses
Africa contributes less than 1% to the $5 trillion global currency market, partly because there’s no liquidity for intra-African currency pairs. Juicyway provides customers access to liquidity pools for local and international payments and foreign exchange through its web and mobile apps, as well as APIs covering currencies like Nigeria's naira, USD, GBP, and CAD.
The stablecoin platform displays real-time rates based on what others are willing to pay, fostering a "liquid ecosystem" where competition and transparent pricing lower remittance costs. Market-driven pricing is critical to Juicyway’s operations in Nigeria's volatile economy. The startup runs Naira Rates, the country’s largest price discovery engine for the naira, with nearly 500,000 Twitter followers relying on it to track foreign exchange rates.
In addition, Juicyway offers multicurrency-insured accounts for transactions facilitated by partners like Access Bank in Nigeria for remittance services; stablecoin infra startup Bridge, which Stripe recently acquired, to move, store, and accept stablecoins; and Lead Bank, a major fintech partner bank in the U.S., to provide virtual dollar accounts for its customers.
While crypto and stablecoin technology offer clear advantages in reducing costs and speeding up settlements, such partnerships are necessary to maintain compliance and manage risk. Therefore, to strengthen compliance, Juicyway hired Joshua Wasserman, a former FDIC bank examiner and Cash App compliance leader, and collaborates with Sumsub for advanced KYC, KYB, and KYT processes, allowing the creation of transaction limits and tracking anomalies in user behavior to prevent fraud and money laundering, the founders said.
Also, Juicyway understands the partner risk involved as a fintech relying on partners in light of the recent Synapse debacle and is actively discussing with other banks and payment processing platforms, according to Johnson.
“One way we've managed to stay ahead in navigating complex financial operations is by clearly separating the roles of our principal custodians and payment processors rather than relying on one entity to handle both. However, what I've described right now is not foolproof, so we’re also diversifying our banking partners and payment processors in those markets,” the CEO said.
The fintech's revenues come from processing and payment fees, with take rates ranging from 0.2% to 10% on certain transactions. Moving forward, it'll look to generate additional revenue from earning interest on customer balances, Johnson said on the call.
Two months ago, Yellow Card, a startup leveraging stablecoin technology to assist over 30,000 businesses in Africa and beyond with payments and treasury management, raised $33 million from several investors, including BlockChain Capital. It’s part of a growing wave of startups, including Conduit, that are applying stablecoin tech to cross-border payments across Africa and other emerging markets. It’s unclear if other players like YC-backed Waza and Verto use stablecoins; however, their overlap in cross-border payments puts them in competition for the same market.
While Johnson views these startups as partners in an evolving cross-border payment ecosystem, he thinks Juicyway contrasts itself at the stablecoin orchestration layer, focusing on meeting customer needs at both the supply and demand ends. “Our single and biggest North Star is increasing the access of Africans to the global economy, and it shapes how we make decisions,” said the executive. “What that means for us is that we’re heavily product- and compliance-led, more than we can be finance-led.”
Like other platforms issuing or using stablecoin technology, Juicyway has had to acquire money transmitter licenses to operate -- in its case, across the U.S., the U.K., Canada, and Nigeria -- given the regulatory ambiguity surrounding crypto and stablecoin issuance and usage globally. Over the next few years, the 3-year-old fintech might acquire similar licenses in other African countries as it looks to become the platform where Africans and those doing business on the continent can easily convert African currencies to local ones and back.
Early-stage African investor P1 Ventures led the pre-seed round with participation from Ventures Platform, Future Africa, Magic Fund, Microtraction, and other angel investors.
This article originally appeared on TechCrunch at https://techcrunch.com/2024/12/16/this-stealthy-african-stablecoin-startup-already-processed-over-1b-in-cross-border-payments/
