Canza Finance, a Web3 neobank enabling cross-border payments for African startups, has closed a $2.3 million strategic round. The company will use the funding round to acquire licenses from diverse financial regulators across Africa and build the foundation for its innovative FX DeFi platform, Baki. Canza has now raised $5.5 million in total after previously closing a $3.27 million seed round last year. Its latest round was led by Polychain Capital, with participation from Protocol Labs, Avalanche’s Blizzard Fund, 99 Capital, Stratified Capital, Hyperithm, and others.

Businesses in African markets like Nigeria, Cameroon, and Senegal that need to make cross-border payments often face slow and expensive traditional methods for sending and receiving international payments. These limitations often stop them from getting good deals on international payments, buying and selling stocks, or earning interest on their money.

Pascal Ntsama, Canza’s co-founder and CEO, says the company’s goal is to make it easier for businesses to access financial services that are typically only available to large corporations. Canza works with FX agents in these regions to provide a faster and cheaper way to send and receive money. To complete a transaction, businesses have to submit a valid invoice and complete the KYC/KYB processes. Canza determines the exchange rate for the transaction and completes the transaction within 24 hours.

Canza makes money by charging 1% of the transaction processed. The startup hopes to reduce its transaction fees to 0.2% through the introduction of Baki, its synthetic FX exchange on-chain protocol—its new system for exchanging different currencies digitally without real money involved.

Through Baki, Canza uses stablecoins—digital currencies pegged to the dollar—to help businesses swap their currencies to the dollar without incurring hefty forex fees. By embracing stablecoins and decentralised finance tools like Baki, Canza helps them to secure dollar stability and overcome traditional forex hurdles. This reduces transaction costs to a mere 1%.

The startup claims it processes transactions worth $2,000,000 weekly and currently has 150 clients. “We aim to significantly boost infrastructure development, particularly in Africa. With over 50 countries on the continent, our focus is on expanding infrastructure and obtaining necessary licenses in suitable jurisdictions. Additionally, we will drive the growth of our DeFi infrastructure products,” Oyedeji Oluwoye, co-founder and CTO of Canza Finance told TechCabal.

In the coming months, the startup hopes to acquire multiple licenses it needs for virtual asset custodian, broker-dealer, and exchange services, Ntsama said. “We aim to secure a Money Services Business (MSB) license in the United States, obtain a Foreign Exchange (FX) license in Nigeria, and acquire three crucial Virtual Asset Licenses from the Financial Service Commission of Mauritius.“

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