Duplo Inc, backed by yCombinator (YC W22) has raised $1.3M in pre-seed funding, to build payments operating system for B2B businesses in Nigeria. The round was led by early-stage pan-African VC firm Oui Capital with other local investors participating.
The friction Duplo is fixing in a nutshell, is payments in the FMCG sector — which are primarily cash-based. This is battered d by inefficient processes which cost time, resources and customers. Hence, Duplo, a Lagos-based fintech, is attempting to tackle these inefficiencies by digitizing payment flows for B2B companies, starting with those in this industry.
Yele Oyekola who is the CEO started Duplo based on his experience as an economic policy officer for the UN in Africa, where touring different countries opened his eyes to how people and businesses were heavily reliant on cash and also as former product lead at Carbon.
“We are trying to make cash obsolete in Africa where lots of businesses in the distribution space heavily transact in cash for obvious reasons,” said the chief executive officer to TechCrunch in an interview.
“So, we’re focused on distributors, merchants and aggregators to stop the use of cash in this value chain because everyone knows how expensive cash is and how difficult it is to move with issues around theft and fraud.”
With Duplo at the back of the FMCG businesses , distributors can create unique virtual accounts for retailers and agents to make real-time payments or bank transfers, while the platform helps to reconcile their accounting books automatically.
Duplo business model is simple. Duplo charges a 1% fee for every transaction performed on its platform. And depending on their size, businesses also pay between ₦100 (~$0.20) to ₦1,000 (~$2.00) to create virtual accounts.
Last November, Duplo got into yCombinator and is taking part in the accelerator’s current winter batch in Silicon Valley.
Other local and international investors that participated in the round are MyAsia VC, Y Combinator, Flutterwave CEO Olugbenga “GB” Agboola and Mono CEO Abdul Hassan.