Cowrywise raises $3 million in pre-Series A round

Nigerian wealth management startup, Cowrywise, has raised $3 million in a funding round led by Quona capital.

Cowrywise co-founders, Edward Popoola and Razaq Ahmed.  

Cowrywise, a Nigerian wealth management app that helps users enhance at saving and investing their money, has raised $3 million. The pre-Series A funding round was as soon as led by Quona capital. Assorted participants in the round are Sahil Lavingia, Tsadik Foundation, and a syndicate of Nigerian angels.

Founded in 2017 by Edward Popoola and Razaq Ahmed, Cowrywise has grown from launching with a savings characteristic to providing several funding alternatives to users in Nigeria.

The company aims to meet a search info from for capital preservation and wealth building as the Nigerian economy contracts. Vulnerable wealth management companies desire gigantic tickets simplest, leaving a market of tens of tens of millions of runt and medium earners hanging. This divide has allowed digital avid gamers, who realize how runt sums can compound, to fetch into wealth management.

Really appropriate one of the pioneers of digital wealth management, PiggyVest, started by allowing users save money whereas offering better returns than banks. In two years, it reported savings of N1 billion. 

Cowrywise has differentiated itself by de-emphasizing savings and focusing on mutual funds. 

Cowrywise and Mutual funds

Razaq Ahmed, Cowrywise’s CEO, told TechCabal that the app has 220,000 registered users and aims to beget 10 million registered users by 2025. Its target is a chunk of the 20 million folks who, in response to 2015 records, beget financial institution accounts in Nigeria. 

These 20 million financial institution users are composed underserved. Insurance coverage penetration is low, fetch admission to to credit score is advanced, and records about how unparalleled folks can accomplish wealth is inaccessible. A financial institution division in Lagos, as an illustration, is extra liable to be helpful about deposits and topic resolution than funding alternatives. 

So whereas wealth management apps in Nigeria beget led with the premise that they permit you to save a great deal of money at better rates than the financial institution, Cowrywise has popularised mutual funds. 

A mutual fund is a pooled fund which invests in shares, bonds, and other money market instruments. 

Scaling mutual fund choices

It’s advanced for frail wealth managers to account for acquisition costs for patrons who aren’t gigantic spenders. Nonetheless online equivalents can reach folks all over social media platforms and support them to make investments sums as small as N1000 ($2.62). 

It’s more uncomplicated to nudge users in other funding directions as soon as they already save money to your platform. This has been Cowrywise’s capability of differentiating itself. It has repeatedly stated; “save money with us, but it’s better to fetch mutual funds.” It feels a chunk counterintuitive to train your users to fetch other mutual funds over you, but one argument is that they’re transparent. 

API led alternatives as factual scale

Razaq Ahmed reckons that much less than 1 million Nigerians make investments in mutual funds. Because mutual funds are pooled, they’ll also impartial now not want consumers to beget a bunch of money to make investments in them. So if folks aren’t investing in them, it’s a ways going to also imply they’re inaccessible. 

“We’re looking to grab away the obstacles by making mutual funds and other funding alternatives accessible. You’d also delivery investing in a pair of minutes. Our platform is transparent and you may explore your investments on the bolt.”

Cowrywise can even be providing frail wealth managers fetch admission to to its API in narrate that it would originate a market where users can fetch from several choices.

“We are going to be the excellent basket of mutual fund fluctuate in the nation,” says Razaq excitedly. 

By giving licensed money managers fetch admission to to its API, Cowrywise will enable its users to swap from one mutual fund to one more without leaving the app. It sounds easy, but it’s steadily a recreation-changer as SEC’s contemporary rules squeeze out wicked funding actors love MBA International substitute that promise a fortune and leave potentialities hanging. 

Quona’s ambitions for Cowrywise

For the time being, Cowrywise companions with United Capital Asset Administration, Meristem Wealth Administration, Afrinvest Wealth Administration, ARM Funding Managers and Lotus Capital. 

Quona capital’s pondering is that Cowrywise can select a generation of users who desire higher than an uninspiring economy provides.

Cowrywise product screen

It explains why right here is their first funding in Nigeria. Johan Bosini, partner at Quona Capital stated, “Cowrywise’s outlandish capability to wealth management and financial planning via an accessible cell platform increases financial resilience for Nigerians in a vogue that we imagine can beget a obvious impression in the long-term. We’re wrathful to offer a enhance to this team and originate our first Nigerian funding in Cowrywise.”

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