Sudo Africa, which provides a card-issuing API for developers and businesses in Nigeria, has raised $3.7 million in pre-seed funding.
Global Founders Capital led the round. The participating VCs are Picus Capital, LoftyInc Capital, Rallycap Ventures, Kepple Africa, Berrywood Capital, and ZedCrest.
Some of the company's founders are also investors.
Card-issuing API, which was pioneered by the likes of Rapyd, Ayden and even Stripe globally, is getting attention from investors who think it is the next big thing in a sector that has attracted the most VC dollars.
The opportunity to build Sudo was due to a problem they faced while attempting to issue cards at their previous startup: a mobile wallet system allowed users to aggregate existing financial institutions into a single platform.
It took a lot of time for them to print up to 1,000 cards. It was the first time we thought about how to issue cards.
When global financial systems come into play, issues always arise when startups create silo interfaces that allow their customers to send or receive funds between themselves.
A mobile wallet or local card in Nigeria trying to make a purchase on Amazon is a terrible experience. With the introduction of virtual dollar cards in a few digital banks, this has become less of an issue. Sudo Africa is a card-issuing platform that is behind this technology.
The two people are: Kabir Shittu (COO) and Aminu Bakori (CEO).
Sudo Africa takes days to give cards, compared to weeks or months for banks. The company's infrastructure allows it to issue virtual and physical cards to its customers in partnership with licensed card issuers. The platform lets businesses control and program cards to their liking, build their features, and securely integrate with other services.
This is a detailed explanation. If a company uses Sudo Africa to issue cards for employee expense management, the employees are given cards with a low balance so whenever they need to use the card, an API is called each time to decide whether to approve or deny the transaction in real time.
Another example is of a delivery company that sends a dispatch rider with a card to make a transaction at a mall and spend a certain amount of money. If the rider decides to use the card in another mall for any reason or spend more than the intended budget, the card won't work.
This is more than just creating a card, funding it, and allowing the customer to spend where he wants.
All of the controls that we have set up on the card, like the spending controls, where you can set how much can be spent, and when, put the company in the front line.
Sudo Africa has features that differentiate it from the likes of YC-backed Union54 and the new entrant into the card-issuing business, the founders argue. Considering the features each company claims to have on their sites, it seems the trio are almost identical.
Tiger Global leads $3M round in Zambia’s Union54 for its card-issuing API
Shittu, the company's COO, said that Sudo customers span a number of sectors. He said that they include non-tech enterprises, government agencies, commercial banks and e-commerce companies.
The company charges interchange fees when its issued cards are used to make a web or POS transaction and takes authorization fees when spending and location-based controls are made. Shittu claims that Sudo collects card production and personalization fees cheaper than the incumbents.
Sudo Africa is the only player in this space that offers physical and virtual cards in Nigeria. Union54 has customers across Africa despite being based in Zambia. Merchants in 35 African markets can issue virtual cards, but only those in Nigeria can get physical cards.
It is expected that Sudo Africa, which is setting an example for other fintechs and startups trying to make a name for themselves outside Lagos, will want to expand to other African markets with this investment, not necessarily as a result of competition, but rather necessity. The chief operating officer said that they will probably be in three or four more African countries by the end of the year.
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