Stitch raises $21M for its API infrastructure and embedded finance platform


Image Credits: Stitch

Open finance continues to be a significant theme in the world of fintech as businesses tap APIs to access customers’ financial accounts and provide a gamut of integrated and embedded financial services. In the latest development, Stitch — one of the prominent players building and operating these APIs in Africa — confirmed to TechCrunch that it has raised $21 million in Series A funding.

This news follows the $4 million Stitch raised out of stealth in February 2021, a prequel to the $2 million extension round it secured four months ago, bringing its seed round to $6 million. In total, Stitch has raised $27 million to date.

The South African API fintech enables businesses to build, optimize, and scale financial products. Per a statement released by the company, it plans to create a “financial graph” ecosystem across Africa with the new funding. 

The company describes the financial graph as an infrastructure for financial building blocks that allow businesses to write code once, launch in multiple markets and scale faster based on interoperability across regions, providers, banks, and other types of financial accounts.

“We sort of view the broader financial ecosystem as a bunch of different nodes–bank accounts, merchants such as fintechs or end-users–which are all intrinsically connected,” Stitch CEO Kiaan Pillay said to TechCrunch in an interview. “Often, we think about the fact that these connections between geographies and institutions don’t exist yet. And a lot of what we try to do is to bridge those connections and to make those connections ubiquitous.”

Stitch emerges from stealth with $4M for its API fintech play in Africa

Stitch views this graph in three stages. The first is what it launched from stealth: the pure infrastructural play of connecting financial and bank accounts with an API. The second seeks to acquire merchants and businesses to build use cases and applications on top of that infrastructure. And the last is getting end consumers to link their accounts via these businesses.

“On the high level, people moving from cash to digital for the very first time causes more fragmentation. Our view is that encompassing this all in one network or graph helps to open the space up and break down the silos,” said Pillay. “And the way we ultimately think about that is that people can easily move money between various applications between various geographies and institutions.”

Stitch’s provides solutions for e-commerce companies, marketplaces & platforms and its leading clientele, fintechs. As with other years, African fintechs outperformed other startups in raising venture capital, particularly in a record-breaking 2021 where they raised 50-60% of total VC funding per reports. Their importance can’t be overstated and infrastructural players such Stitch, Mono, Okra, Plaid and OnePipe —all who raised money within the past year, some in seed and others, Series A — are pivotal to that collective growth of driving financial inclusion and ease of payments across the continent.

These business customers use Stitch for use cases such as KYC & onboarding, personal and business financial management, lending, wallet top-ups and e-commerce checkouts. The platform’s data, and identity products allow businesses to access customer transaction histories and balance data, verify account information, and perform fraud checks. The payments product enables bank-to-bank transfers for one-click pay-ins and payouts.

Some customers include wallet-based companies such as Chipper Cash and Luno; embedded finance providers like ImaliPay; subscription platforms like FlexClub; and payment aggregators like Yoco.

Image Credits: Stitch

In April 2021, Stitch launched its payments product in South Africa and noticed a 50% month-on-month growth in payments volume the following six months. In October, Stitch expanded the payment product to Nigeria and, at the time, was on track to facilitate $10 million in monthly payments by December.

On the call, Pillay, who co-founded Stitch with Natalie Cuthbert and Priyen Pillay, didn’t give any update on this metric but said Stitch had seen a 104% month-on-month growth in payments value since launching the product last April. And in Q4 2021, the platform witnessed a 44% month-on-month customer growth and a 72% month-on-month increase in linked financial accounts.

“We’re proud of the partners and customers we have here as we continue to deepen the payments product and look at monthly and recurring payments, which are interesting feature sets for us,” said Pillay.

“We recently had a few customers go live in Nigeria, which has been very exciting for us. We just offer payments there but are eager to deepen the products. We will look at adding data and identity this year, as well as deepening the payments set similarly to how we have it in South Africa.”

New York-based long-term investment firm The Spruce House Partnership led this round of funding. The round also welcomed participation from new and existing investors like PayPal Ventures, TrueLayer, firstminute capital, The Raba Partnership, CRE Venture Capital, Village Global, as well as fintech founders and companies such as TrueLayer, founders of Chipper Cash, Quovo and Unit, and Guillaume Pousaz’s Zinal Growth.

“We have been following startups in Africa for many years. Our diligence was very clear that this is one of the most talented teams on the continent, and we are excited to be a part of what they are building at Stitch,” said Ben Stein, co-founder of The Spruce House Partnership.

Pillay says raising money from VC firms and operators that have scaled fintech products across multiple geographies gives the company “something pretty special” as it enters its next growth phase. The funding, Stitch said, will allow it to expand its team across offices in Cape Town, Johannesburg and Lagos, launch new product offerings and enter new markets across the continent.

African tech took center stage in 2021

Tiger Global backs African fintech Mono in $15M Series A round

More TechCrunch

“When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine.”

Scarlett Johansson says that OpenAI approached her to use her voice

A new self-driving truck — manufactured by Volvo and loaded with autonomous vehicle tech developed by Aurora Innovation — could be on public highways as early as this summer.  The…

Aurora and Volvo unveil self-driving truck designed for a driverless future

The European venture capital firm raised its fourth fund as fund as climate tech “comes of age.”

ETF Partners raises €284M for climate startups that will be effective quickly — not 20 years down the road

Copilot, Microsoft’s brand of generative AI, will soon be far more deeply integrated into the Windows 11 experience.

Microsoft wants to make Windows an AI operating system, launches Copilot+ PCs

Hello and welcome back to TechCrunch Space. For those who haven’t heard, the first crewed launch of Boeing’s Starliner capsule has been pushed back yet again to no earlier than…

TechCrunch Space: Star(side)liner

When I attended Automate in Chicago a few weeks back, multiple people thanked me for TechCrunch’s semi-regular robotics job report. It’s always edifying to get that feedback in person. While…

These 81 robotics companies are hiring

The top vehicle safety regulator in the U.S. has launched a formal probe into an April crash involving the all-electric VinFast VF8 SUV that claimed the lives of a family…

VinFast crash that killed family of four now under federal investigation

When putting a video portal in a public park in the middle of New York City, some inappropriate behavior will likely occur. The Portal, the vision of Lithuanian artist and…

NYC-Dublin real-time video portal reopens with some fixes to prevent inappropriate behavior

Longtime New York-based seed investor, Contour Venture Partners, is making progress on its latest flagship fund after lowering its target. The firm closed on $42 million, raised from 64 backers,…

Contour Venture Partners, an early investor in Datadog and Movable Ink, lowers the target for its fifth fund

Meta’s Oversight Board has now extended its scope to include the company’s newest platform, Instagram Threads, and has begun hearing cases from Threads.

Meta’s Oversight Board takes its first Threads case

The company says it’s refocusing and prioritizing fewer initiatives that will have the biggest impact on customers and add value to the business.

SeekOut, a recruiting startup last valued at $1.2 billion, lays off 30% of its workforce

The U.K.’s self-proclaimed “world-leading” regulations for self-driving cars are now official, after the Automated Vehicles (AV) Act received royal assent — the final rubber stamp any legislation must go through…

UK’s autonomous vehicle legislation becomes law, paving the way for first driverless cars by 2026

ChatGPT, OpenAI’s text-generating AI chatbot, has taken the world by storm. What started as a tool to hyper-charge productivity through writing essays and code with short text prompts has evolved…

ChatGPT: Everything you need to know about the AI-powered chatbot

SoLo Funds CEO Travis Holoway: “Regulators seem driven by press releases when they should be motivated by true consumer protection and empowering equitable solutions.”

Fintech lender SoLo Funds is being sued again by the government over its lending practices

Hard tech startups generate a lot of buzz, but there’s a growing cohort of companies building digital tools squarely focused on making hard tech development faster, more efficient and —…

Rollup wants to be the hardware engineer’s workhorse

TechCrunch Disrupt 2024 is not just about groundbreaking innovations, insightful panels, and visionary speakers — it’s also about listening to YOU, the audience, and what you feel is top of…

Disrupt Audience Choice vote closes Friday

Google says the new SDK would help Google expand on its core mission of connecting the right audience to the right content at the right time.

Google is launching a new Android feature to drive users back into their installed apps

Jolla has taken the official wraps off the first version of its personal server-based AI assistant in the making. The reborn startup is building a privacy-focused AI device — aka…

Jolla debuts privacy-focused AI hardware

The ChatGPT mobile app’s net revenue first jumped 22% on the day of the GPT-4o launch and continued to grow in the following days.

ChatGPT’s mobile app revenue saw its biggest spike yet following GPT-4o launch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

1 day ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions