One of the biggest operational challenges businesses face is managing expenses. It is mostly done manually hence its complication, especially when tracking and recording. For instance, it’s a common practice in Nigeria for employers to demand that employees keep receipts of expenses incurred and present them to be reimbursed. This means that employees will have to collate both paper and digital receipts and label them accordingly before submitting, a process that can lead to omission error and even fraud. What happens in cases where an employee misplaces receipts or chooses to tamper with the amounts on them? It becomes difficult to confirm the validity of the claim.
This is the problem Allawee, a Nigerian fintech headquartered in San Francisco, is solving with its all-in-one financial platform. The startup has built a suite of financial software and hardware that takes away the hassle of expense management and reduces the error and fraud ratio to zero.
Allawee, a B2B fintech founded by Ikenna Enenwali and Oreofe Olurin in 2022, allows entrepreneurs to create business accounts, deposit money, and spend via both physical and virtual cards—powering business-to-business transactions via card payment. “We are building a financial control platform for businesses,” Enenwali told TechCabal over a Google Meet call.
The platform gives control to founders, accountants, managers or anybody with a designated authority to handle the business account. Allawee, via its partnership with Providus bank, provides a business current account to its users. Users can load their account with money and create naira or dollar cards or both to spend money physically anywhere in Nigeria or virtually online. Businesses can create an unlimited number of cards, depending on the number of employees they intend to give. Once an employee spends via the Allawee card, the platform automatically records it with receipts and descriptions. This removes the chance of fraudulent activities and saves time during auditing.
For instance, a business owner can choose to budget for a project to be undertaken by a particular employee, and create a new card for the project or load up an existing card used by the employees. The owner can also set up different controls like daily spend, or markup a spend for a particular activity like food or fueling of vehicles. Enenwali said that businesses can even set controls on the exact filling station to buy fuel and the exact place to eat. This means that the card will not work outside of the preset controls.
At the point of reporting, all business owners need to do is to extract the details and export them into whatever third party platform they wish. “This saves time and removes doubts when recording expenses,” Enenwali added.
Building a financial ecosystem
Allawee is barely two years old and has pivoted twice. The original idea that birthed the company was to solve lack of credit and capital for small businesses on the continent. So it launched as a credit card lender, but along the line, it became apparent that the company’s risk assessment wasn’t strong because they weren’t privy to customer’s credit information. “The actual credit risk data was a problem in Nigeria, there was not enough data for us to figure out who was a good borrower and who was not. So we decided to build our own credit risk API aggregator,” Enemwali told TechCabal.
With its API and web app, Allawee simplified the process of accessing multiple credit bureaus for credit checks and reporting. With one API call, customers were able to receive reports across the three major credit bureaus—CRC Bureau Credit Limited, CR Services Credit Bureau PLC, and First Central Credit Bureau Limited. But as time went on, that became insufficient, as the company was still at the mercy of others because it needed to fetch data from banks and card issuance agencies. “To solve this, we decided to build our own card infrastructure. We want to be the issuer of cards, collect data directly, and then make credit decisions based on that. You see, we have built a financial ecosystem for business,” said Enenwali.
The strategy and roadmap may have changed, the company’s CEO maintained that the goal hasn’t changed. Allawee wants to build a well-rounded credit facility for business and is currently building the peripherals, which can stand as products on their own, that will make the facility formidable. Today, while this model is quite prevalent in retail fintech, Allawee seems to be the only startup playing this direction for businesses. B2B neobanks like Brass and newly launched Kuda Business, which seems to be offering everything Allawee offers, aren’t issuing cards for businesses nor do they offer robust expense management tools.
To build an ecosystem, a company must have gathered momentum or be leading a particular vertical it can leverage to bundle more. Allawee appears to be using its card issuing & payments infrastructure to create a moat that will carry the ecosystem it is building. Considering that the global expense management market is projected to grow from $6.51 billion in 2022 to $12.05 billion by 2029, at a CAGR of 9.2% in the forecast period, this seems like a strong vertical to build on. According to the CEO, the company has experienced rapid growth since launching “with hundreds of businesses signing up and over half a million dollars of payments volume already.”
Last year, the company raised a pre-seed led by Voltron Capital with participation from ODX, a fund by On Deck Co-CEO, Erik Torenburg and Founding Partner, Shawn Xu. RaliCap and Piggy Tech also co-invested. Enenwali told TechCabal that the next thing for the business is to focus on expense management and card issuance infrastructure as it will lay the actual foundation they need to build a full-on financial ecosystem.