Kiaan Pillay runs Stitch, which offers a B2B application programming interface (API) focused on fintech infrastructure. Launched in South Africa in February, it was designed to address challenges businesses face in scaling across fragmented markets in Africa. Stitch, whose clients include Chipper Cash, Yoco, and Paystack, announced this week an extension in its seed round by $2 million for its expansion to Nigeria.
What’s the biggest challenge to raising funds as a South African startup?
As a South African startup, there is often an immediate comparison made with markets that are perceived to be larger, such as Nigeria and Egypt. This often leads to a discussion around when we will become pan-African rather than understanding some of the compelling reasons to continue to also deepen the opportunity in South Africa.
Which one trend in African fintech are you most excited about?
Probably that, in many cases, people’s first interaction with a digitally enabled financial product isn’t via a traditional bank. The first place people are storing money digitally on the continent is often a neobank, fintech, or mobile wallet or even crypto.
What key challenges did you consider before this expansion to Nigeria?
In South Africa, we’re seeing a lot of adoption from our identity verification and payments solutions, which only Stitch can do in South Africa, since we integrate with banks. In Nigeria, however, this isn’t a problem. [The local regulator] NIBBS has a very strong baked-in ID verification service through the BVN [bank verification number] system. As well, in South Africa, this doesn’t happen in real time — we have to do a lot of work on the back end to make it real time, whereas, in Nigeria, this is not an issue. Secondly, we thought a lot about how to differentiate Stitch in a market where there are a number of competitors or perceived competitors.
What has been your biggest misstep as a founder and how did you recover?
Being quiet. I’ve been privileged to have worked with an exceptionally talented team and to have support from incredible customers and investors, but we largely operated in stealth for a long time. A lot of the decision around this was driven by fear around how the market would react to what we’re building. But the majority of our recent progress has come from actually getting our product out there, interacting with customers, and realistically failing a ton, and failing fast, but then iterating on that to make the product better.
How does your financial graph product address Africa’s fragmentation problem?
Fundamentally, the function of a graph is to connect the various nodes that operate within it. If you look at a “social graph”, for instance, it looks to bridge the gap between its nodes: people. Our ultimate goal at Stitch is to do the same for the financial ecosystem in Africa. To do this, we need to first create access to individual nodes within the financial graph (such as banks, mobile money wallets, fintechs) and then develop the connectivity between those nodes. Doing so would enable a developer to build a financial product at any starting point, in any region on the continent, and have equal and instant connectivity to all the other encompassing nodes within the graph. We believe that if we get this right, it could unlock massive opportunities for fintech innovators on the continent.
How can African fintechs address the most pressing needs of the mass market?
I think one of the most compelling things about building a fintech solution in Africa is the scale of problems that can be tackled, how urgent these problems are and how many of these problems still exist today. Unique fintech solutions are being developed every day across markets in Africa, including those that can enable something as fundamental as just the ability to send money from person to person. In many markets this is happening for the very first time, in a way that’s really designed for how users in these markets consume financial products.
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