Juicyway, an African fintech that leverages stablecoin technology to power fast and cheap cross-border payments, is launching stealthily after processing more than $1 billion in transaction volume for thousands of African businesses over the past three years.
The fintech says it has processed over 25,000 transactions, generating $1.3 billion in total payment volume (TPV) from 4,000 users. These transactions are essentially powered by stablecoin technology. According to its founders, the fintech has amassed these numbers without publicly available apps 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.
It is only now being launched publicly, after operating in secret for three years and acquiring major clients such as the Bolt and IHS companies; fintechs such as Piggyvest, Bamboo and Afriex; and energy and logistics company Mocoh SA.
One type of customer for a cross-border payments platform could be a remittance business that allows users from, say, the United States to send money to Nigeria. One such company uses Juicyway (a not-so-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 the Nigerian naira. After conversion, the remittance firm can distribute the converted funds to its customers.
Traditional international and cross-border payment platforms have been facilitating this process for years. However, a new wave of platforms based on stablecoin technology is challenging these conventional methods in developed and emerging markets.
Instead of directly transferring fiat currencies, these platforms use cash deposited in US bank accounts to purchase stablecoins such as USDC or USDT on behalf of users. These stablecoins are then sent to users’ digital wallets, where they can store the cryptocurrency or exchange it for local currency, offering a faster, more flexible and often cheaper alternative.
As executives at Andela, an African yet global marketplace for technical talent, and Bamboo, one of Africa’s largest retail stock brokerages, respectively, Justin Ziegler and Ife Johnson, have seen firsthand the challenges their former employers faced when moving money across borders, despite numerous cross-border solutions on the market.
Ziegler shared that despite Andela’s success and raising hundreds of millions of dollars, bringing those funds to the continent for operations has proven challenging.
“It didn’t make sense that even though there were tons of solutions, they didn’t solve the problem in a way that a Bamboo or an Octa could trust,” added Johnson (CEO of Juicyway) in an interview.
“Even on a personal level I felt this disparity. Without access to American banks or platforms like Juicyway, being born and raised in Africa, I would not be able to participate in the global economy, you know, as freely as I currently do.”
These shared frustrations gave birth to Juicyway, which the founders say is doing, as Johnson describes it, “increasing African participation in the global economy.” The platform, which announces a $3 million pre-seed round, allows individuals and businesses to send, receive and process payments globally, supporting fiat currencies and cryptocurrency transactions.
Provide liquidity to businesses
Africa contributes less than 1% of the $5 trillion global currency market, partly because there is no liquidity for intra-African currency pairs. Juicyway provides customers with access to liquidity pools for local and international payments and foreign exchange through its web and mobile apps, as well as APIs covering currencies such as Nigerian Naira, USD, GBP and CAD.
The stablecoin platform displays real-time fees based on what others are willing to pay, promoting a “liquid ecosystem” where competition and transparent pricing reduce the costs of remittances. Market-driven pricing is critical to Juicyway’s operations in Nigeria’s volatile economy. The startup runs Naira Rates, the country’s largest naira price discovery engine, with nearly 500,000 Twitter followers relying on it to track exchange rates.
Additionally, Juicyway offers multi-currency insured accounts for transactions facilitated by partners such as Access Bank in Nigeria for remittance services; stablecoin infra startup Bridge, recently acquired by Stripe, to move, store and accept stablecoins; and Lead Bank, a leading fintech partner bank in the United States, to provide virtual dollar accounts to its customers.
While cryptocurrency and stablecoin technology offer clear benefits in reducing costs and accelerating regulations, such partnerships are necessary to maintain compliance and manage risks. Therefore, to strengthen compliance, Juicyway has hired Joshua Wasserman, former FDIC bank examiner and Cash App compliance leader, and partners with Sumsub for advanced KYC, KYB and KYT processes, enabling the creation of transaction limits and monitoring of anomalies in user behavior to prevent fraud and money laundering, the founders said.
Additionally, according to Johnson, Juicyway understands the risk associated with partners as a fintech that relies on partners in light of the recent Synapse disaster and is actively in discussions with other banks and payment processing platforms.
“One way we have managed to stay at the forefront of managing complex financial operations is by clearly separating the roles of our primary custodians and payment processors rather than relying on a single entity to manage both. However, what I have described right now is not foolproof, so we are also diversifying our banking partners and payment processors in these markets,” the CEO said.
The fintech’s revenue comes from processing and payment fees, with withdrawal rates ranging from 0.2% to 10% on certain transactions. Going forward, it will look to generate additional revenue by earning interest on customer balances, Johnson said on the call.
Two months ago, Yellow Card, a startup that leverages 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 is part of a growing wave of startups, including Conduit, that are applying stablecoin technology to cross-border payments in Africa and other emerging markets. It’s unclear whether 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 sees these startups as partners in an evolving cross-border payments ecosystem, he believes Juicyway runs counter to the orchestration layer of stablecoins, focusing on meeting customer needs on both the supply and demand sides. “Our single greatest north star is increasing Africans’ access to the global economy and influencing how we make decisions,” the executive said. “What that means for us is that we are very product and compliance driven, more than we can be finance driven.”
Like other platforms that issue or use stablecoin technology, Juicyway has had to acquire money transmission licenses to operate, in its case, in the US, UK, Canada and Nigeria, given the regulatory ambiguity surrounding the the issuance and use of cryptocurrencies and stablecoins globally. Over the next few years, the three-year-old fintech may 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 into local ones and vice versa.
African early-stage investor P1 Ventures led the pre-seed round with participation from Ventures Platform, Future Africa, Magic Fund, Microtraction and other angel investors.
