- Canza Finance, a Nigerian-based cryptocurrency startup, has closed a $2.3 million round to support the development of its DeFi products, including the newly launched Baki.
- Polychain Capital led the round, with other investors, including Protocol Labs, Blizzard Fund, 99 Capital, Stratified Capital, and Hyperithm.
- Canza Finance's latest funding comes about two years after it raised $3.27 million in a seed round to offer cryptocurrency-based services in Nigeria and other parts of Africa.
Pascal Ntsama and Oyedeji Oluwole (CTO) founded the DeFi-focused neobank in 2020 to improve the efficiency of cross-border settlement in Africa.
When it first launched, it planned to assist African companies — many of which had trouble obtaining foreign exchange — in using cryptocurrency to settle international trades.
The startup helped companies and local foreign exchange agents, known as "Aboki" informally, settle payments for goods and services by collaborating with on- and off-ramp partners in multiple countries.
Canza uses Baki to help businesses swap their currencies to the dollar without incurring high forex fees.
The fintech also provides several products, such as DeFi protocol jollof.fi and CXDS (Centralised eXchange Default Swaps) for creating credit default swaps. It also plans to launch the OTC trading platform jaraOTC for FX and Canza Crypto Teller Machine (CTM) for machine onramps and offramps.
Canza generates revenue by charging 1% of each transaction processed. Baki, the startup's synthetic FX exchange on-chain protocol — a new system for digitally converting currencies without the need for actual money — aims to reduce transaction fees to 0.2%.
Additionally, Canza Finance says it facilitates approximately $2,000,000 in transactions weekly and serves markets in Senegal, Nigeria, Cameroon, and the United States.
Moreover, Oluwoye states the company plans to accelerate infrastructure development, particularly in Africa.
“With over 50 countries on the continent, our focus is on expanding infrastructure and obtaining necessary licences in suitable jurisdictions. Additionally, we will drive the growth of our DeFi infrastructure products.”
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To fulfil its objectives with the recently obtained funding, Canza Finance intends to become an authorised registered entity by securing operational licences across several countries on the continent.
Cryptocurrency is fast becoming widespread, and globally, crypto regulation has taken centre stage. In Africa, countries like South Africa have called for crypto service providers to apply for a licence before the end of 2023, and so far, it has received 128 applications.
In December 2023, the Nigerian Central Bank lifted the restriction on crypto bank accounts. However, it mentioned that a licence document issued by the Nigerian SEC is one of the requirements for digital service providers to open an account with the bank.