Okra, a Nigerian fintech whose APIs allow banks and other financial service providers to access customers’ data, is building a cloud infrastructure for businesses to host their data and run workloads. With Nigerian startups keen to reduce costs as inflation accelerates and interest rates remain high, Okra believes it can build a cheaper and more reliable alternative to foreign cloud providers like AWS and Azure.
“Like every other business, we were doing market research to find more revenue streams,” one highly placed employee said in March, confirming its new cloud adventure.
Fara Ashiru, Okra’s CEO did not respond to a request for comments.
With this expansion, Okra joins a growing band of local cloud service providers rising to meet the demands of startups, big businesses, and government agencies. Some include Nobus Cloud Services, MainOne Cloud, Web4Africa, Galaxy Backbone, and Layer3 Cloud.
While Africa’s cloud computing is highly contested, it is relatively large and the potential customers are willing to spend on reliable service. Open finance, the space Okra currently operates in, is currently a smaller opportunity.
Okra’s open banking APIs enable third-party financial service providers to have responsible access to the bank information of their customers. The fintech’s expansion comes three months after it shut down three of its open finance products—Balance, Income, and Transaction—which helped digital lenders determine the creditworthiness of borrowers and facilitate loan repayment.
“These products did not make any business sense to hold on to,” an Okra employee told TechCabal.
There is very little visibility into the revenue of these open finance startups because they are private companies. One African early-stage investor questioned the market opportunity of open finance.
“It is a small market and there are three big players who have raised a lot of money,” said the investor who asked not to be named so he could speak freely. “Eventually there will be one market leader.“ Okra has raised about $16.5 million while major competitors, Mono and Stitch, have raised over $17.6 million and over $52 million respectively.
Okra did respond to requests for comments about its expansion.
The market for companies that provide open finance APIs has also been limited by the central bank’s slow progress on open banking regulations. Despite adopting open banking regulations in March 2024, there is still an absence of common data-sharing standards.
Consequently, some open banking users design their services to account for possible lapses in judgment by the technology. For example, digital lenders, aware of the imperfections of these tools in assessing creditworthiness may still apply risk premium to those loans.
Okra had been working to partner with banks to standardise the banks’ APIs ahead of the enforcement of the open banking regulation, according to one person familiar with the business. In turn, Okra planned to use the relationship to improve the reliability of its open banking services. “Operating in silos with banks incentivises unreliability, and if there are no means to hold all partners accountable, scaling will be too risky and hard,” the person said.
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