CrowdForce, a Y Combinator-backed startup that prides itself in being Africa’s largest offline distribution network, has raised the sum of $3.6 million in a pre-Series A funding round. The raised amount has $1 million of it in debt and the round was led by Aruwa Capital Management with participation from HAVAÍC and AAIC.
With the funds raised, the company plans on expanding its team of 76 full-time staff, deepening its operations in cities which it currently operates, reinforcing its marketing efforts as well as increasing its agent network to a three-fold in 2022. It also plans to distribute more POS terminals to small businesses, gas stations and pharmacies, which would act as mobile bank branches.
The startup which was founded in 2015 by Oluwatomi Ayorinde and Damilola Ayorinde was originally known as MobileForms – a data collection agent network. Prior to its change to CrowdForce, the company provided insights on hard-to-reach rural and semi-peri urban populations for businesses across several sectors, NGOs, and development organisations.
Founded by CEO Oluwatomi Ayorinde and COO Damilola Ayorinde, what is today known as CrowdForce originally started as MobileForms, a data analytics platform set up in 2015. At the time, the company provided insights on hard-to-reach rural and semi-peri urban populations for businesses across several sectors, NGOs, and development organisations. The startup which gained backing from the Y Combinator program in 2017 and in 2018, MobileForms performed KYC on 4.5 million eligible micro-traders for the Nigerian government’s TraderMoni small loan program.
Furthermore, in 2019, MobileForms dived into financial services and rebranded as CrowdForce – a technology-driven agent distribution network that enables data collection for businesses and delivery of financial services to the mass market.
PayForce, a CrowdForce product, is a POS-enabled system that provides ATM services, through transfers and bill payments. It is currently present in market clusters and small businesses as both can meet high cash demand from customers in areas where bank branches are absent. For merchants, PayForce helps manage their cash float safely and allows them to earn extra income by acting as an agent.
Speaking on the need to provide an offline distribution network, CEO and co-founder Oluwatomi Ayorinde said, “Fintechs and challenger banks are emerging in Africa to deliver better financial services via digital rails but cash is clearly still king in Nigeria and 97% of retail transactions happen offline”.
“There is a clear need to build an offline distribution network to enable fintechs and challengers to reach the mass market – this is exactly what we’re doing at CrowdForce and this round will accelerate our momentum even more”, he added.
The Y Combinator-backed startup currently has 7,000 active agents, a significantly small figure compared to players like E-Settlement, Paga, or Baxi with an average of 100,000 agents. But to broaden its distribution network, CrowdForce relies on partnerships with cash-heavy small businesses, converting them to mobile bank branches while helping them store their cash on PayForce digital wallets.