Prakhar Singh and Abdulhamid Hassan, Mono’s co-founders. Image credit: Mono
American startup accelerator Y Combinator (YC) will have 36 startups participating in its winter 2021 programme. The only African startup in the group is Mono, a Nigerian fintech building APIs for open banking and simplified financial accounts management.
Mono was founded by Abdulhamid Hassan and Prakhar Singh. They launched the company in August 2020 and a month later, closed a pre-seed round of $500,000. Lateral Capital, Rally Cap Ventures, Golden Palm Investment, and Ventures Platform invested in that round.
After leaving a product manager role at Paystack in 2019, Hassan joined Voyance, a data science company. He and Singh identified a gap; Nigerian digital businesses found it difficult sourcing financial data about their customers from banks.
They started Mono to give these businesses tools to access customer bank accounts, obtain statements, and set up recurring payments through direct debit. They list Carbon and Flutterwave among their current users, and plan to extend their presence beyond Nigeria to Ghana and Kenya.
Nigerian startups dominate YC’s Africa portfolio of about 40 startups, with Egypt and Kenya following at a distance. Stock trading app Thndr and Marketforce, from Egypt and Kenya respectively, were the only African startups at the summer 2020 batch.
YC will invest $125,000 in Mono for 7% equity, and expose the startup to a global network of founders, investors, and customers. The winter programme will be done virtually unlike other years due to the COVID-19 pandemic.
As such, key activities like office hours with YC partners and hangouts with Silicon Valley bigshots will happen over video conferencing.
Mono’s YC journey is remarkable in the relatively short time it has taken since the company was founded. But the funding journey – from a $500k round to a $125k accelerator programme – shows the pride of place YC continues to hold in Africa’s startup ecosystem.
The three month programme will end with a virtual demo day on the 23rd of March. At the one-day event, Mono will have one minute to pitch to a virtual room of investors who, if they like what they see, could invest in the company.
YC’s investment remains a valuable source of funding for early stage African startups. But in Mono’s case, it is more about receiving a badge of validation that opens doors to the world.
YC-backed companies are currently valued at over $300billion and include publicly-traded companies like AirBnB and DoorDash, and super unicorns like Stripe and Instacart. Access to this network provides a gateway to receiving funding from institutional venture capitalists around the world.
Mono’s pre-seed investors also stand to benefit from the YC journey.
A seed round after the three months programme will give the company a significantly higher valuation (according to people familiar with the process), and increase the investor’s expected long-term returns.
Mono is one 12 African fintech startups we think you should watch in 2021. Check the list here.
Correction: An earlier version of this article stated that Mono’s valuation reduced due to Y Combinator’s investment. In fact, it is unclear how the investment affect’s the startup’s valuation. Also, we have clarified that Hassan did not meet Singh at Voyance.