Canza Finance, a Web3 neobank focused on facilitating cross-border payments for African startups, has announced the conclusion of a strategic funding round raising $2.3 million.
We are delighted to announce a strategic fund raise of $2.3m led by @polychain, and participation from: @protocollabs, @AvaLabs, 99 Capital, @BitscaleCapital, @StratifiedCap, @ContangoDigital, @KaironLabs, @hyperithm, @StatelessVC, @ytwovc, @Maple_block, and @HASHCIB pic.twitter.com/3K2LA43Vz5
— Canza Finance (@Canza_Finance) January 16, 2024
According to Canza, the proceeds from the funding round will be utilized by the company to obtain licenses from various financial regulators across Africa and establish the groundwork for its innovative decentralized finance (DeFi) platform for foreign exchange known as Baki.
“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.”
– Pascal Ntsama, the Co-Founder and CEO of Canza Finance
Canza Finance has amassed a total of $5.5 million in funding after concluding a previous seed round of $3.27 million in 2022.
The latest round was led by Polychain Capital, and it saw participation from:
- Protocol Labs
- Avalanche’s Blizzard Fund
- 99 Capital
- Stratified Capital
- Hyperithm
and several others.
Canza collaborates with foreign exchange (FX) agents in African countries that are prone to slow and costly cross-border payments, offering a swifter and more cost-effective method for businesses to send and receive money. To initiate a transaction, businesses need to submit a valid invoice and undergo Know Your Customer/Know Your Business (KYC/KYB) processes. Canza determines the exchange rate for the transaction and ensures completion within 24 hours.
Canza generates revenue by charging a 1% fee on the processed transactions. The startup envisions lowering its transaction fees to 0.2% with the introduction of Baki, its synthetic FX exchange on-chain protocol. Baki, which was introduced in November 2023, represents a new system for digitally exchanging various currencies without the involvement of real money.
With Baki, Canza leverages stablecoins – digital currencies pegged to the dollar – to facilitate currency swapping for businesses without incurring significant forex fees. By adopting stablecoins and decentralized finance tools like Baki, Canza assists businesses in achieving dollar stability and overcoming traditional forex challenges thereby reducing transaction costs to just 1%.
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