Headquartered in Nigeria, Cowrywise has raised $3 million in a pre-series A funding led by Washington DC-based Quona Capital.
The funding round also had the participation of; Sahil Lavingia, Tsadik Foundation, and a host of other local and diaspora-based Nigerian angel investors.
Building-up on a cumulative $500,000 previous funding, the fintech startup plans to expand its product offerings to more asset classes, while deepening its investment in management infrastructure.
Additionally, Cowrywise intends to use some of the funds to support the onboarding of more fund managers in Nigeria and beyond.
Excited about the latest milestone, Cowrywise CEO, Razaq Ahmed said that the funding will push them closer to their goals.
“Our vision is to build a full-fledged wealth management solution, covering financial planning, savings and investments. This funding takes us a step closer to that,” Razaq said.
Similarly, representatives of Quona Capital also expressed excitement towards the new partnership, especially considering it’s the first in the country.
“Cowrywise’s unique approach to wealth management and financial planning through an accessible mobile platform increases financial resilience for Nigerians in a way that we believe can have a positive impact in the long-term.
“We are excited to support this team and make our first Nigerian investment in Cowrywise,” a representative explained.
Co-founded by Razaq Ahmed and Edward Popoola in 2017.
Cowrywise is a fintech startup that offers digital wealth management and financial planning solutions.
Prior to its establishment, Razaq formerly worked as an investment analyst with Meristem securities limited, located in Nigeria.
At Meristem, Razaq covered equities, while making recommendations to retail and wealth management clients.
It was during his stay at the capital market conglomerate that the idea of Cowrywise was born.
According to Rasaq, the existing investment management firms in the country focused mainly on the top 1 per cent.
As such, they couldn’t scale investment products to millions of Nigerians either because of their restricting size or other unknown reasons.
On the contrary, banks had more prospects on this front; they were able to expand drastically in the mid and late 2000s.
It was for this reason that the sector has recorded not just a wild brand network but also a massive customer base.
Currently, there are no fewer than 45 million unique account holders in Nigeria; something that is considered laudable.
However, over the last decade, the profitability of banks’ services in terms of savings and investment have dropped drastically to as low as 3-5% per annum.
Giving the presence of this inadequacy, Rasaq alongside Edward, as the Chief Technical Officer (CTO), founded Cowrywise to fill the null.
Cowrywise business module
Since its launch, the startup has always hoped to deliver access to savings and investment products to the larger population of millennials.
This includes the middle class and the underserved Nigerians.
Rasaq claimed that the lack of access to high-quality savings and investment products by the acclaimed set of people is one major reason behind their existence.
“Wealth management had been strange to many Nigerians because the existing players were not built for the mass market. That has always been a problem we felt required a solution.
“The Cowrywise platform is designed to solve this problem through a combination of free wealth advisory and consumer education, paired with savings and investment offerings that can advance financial inclusion,” he added.
Currently, the digital platform boasts 19 different mutual funds with at least 20% of the total mutual funds in the country registered on the platform.
“We have only onboarded 20% of mutual funds in Nigeria on Cowrywise.
“Our immediate focus is to onboard the other 80% and makes the entire mutual fund industry easily accessible to more retail investors in Nigeria,” Rasaq said.
Some of the existing mutual funds registered on the platform include; Meristem Wealth Management, Afrivest Wealth Management, United Capital Asset Management, among others.
In order to cater to the needs of its diverse customers, Cowrywise uses a company-built algorithm.
This helps to optimise the different investment options.
Cowrywise’s user base has grown remarkably from 2000 users in 2018 to 220,000 as of the time of this publication.
Although the current user base is considered a very small fraction of the estimated 200 million population of Nigeria; the startup hopes to increase the figure in the near future.
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