ADRIAN GARCIA-ARANYOS


The news that Nigeria-based payment infrastructure company Zone just closed an oversubscribed $8.5 million seed round stands out as a bright spot in an otherwise grim time for startups looking to fundraise in Africa, where VC funding across the continent dropped 50% last year. Zone’s fintech platform enables payments and acceptance of digital currencies through its regulated blockchain network. Their round was led by reputable VC firms Flourish Ventures and TLcom Capital and included participation by Endeavor Catalyst.

Zone’s fundraising success speaks to the compelling vision of co-founders Obi Emetaron and Wale Onawunmi and the store of institutional trust they’ve built over two decades working in the Nigerian financial sector. Obi and Wale’s story is another reminder there is no such thing as an “overnight success.” 

As Obi acknowledges, “It took us 20 years to get the trust from the market, the knowledge of the product and the audience to build the product that is going to actually change the financial ecosystem.”   

A first foray in financial services 

To trace the story of Zone’s recent success back to its roots, you have to go all the way back to Obi and his brother Emeka playing in their parents’ garden as kids. Two of four children of a pair of academics, the brothers enjoyed a happy childhood. Still, they always dreamed of something different for themselves than the relatively quiet world of their professor parents. 

“My role models were in tech as I was growing up. Microsoft, Bill Gates and the very early initiatives in computing were going on, and those things were quite exciting to us,” Obi remembers. 

A self-described “nerdy” kid, Obi’s interest in engineering and math led him to complete a degree in electronic computer engineering. While at university, he kindled a love of programming. Immediately following his graduation in 2004, he partnered with three close friends to start a business based on this passion. 

Over four years, the four co-founders built Parkway, a service-based business building software for the financial services sector, ultimately doing more than $1 million in annual revenue. This is a solid business success for a handful of recent grads, but as Obi would eventually realize, the biggest benefit from the experience was in the relationships they developed with Nigeria’s banks.

Scratching an itch for greater impact 

While Parkway was doing well, Obi began to feel restless.” Rather than staying as a services business, how do we convert all this intellectual property into a product that we can monetize and scale to have a lot more impact?” he recalls thinking. 

In 2008, he and his co-founder, Wale Onawunmi, left Parkway to found AppZone, joined by Obi’s brother Emeka. The company evolved in phases. While the ultimate aim was always to build a product-based business, the founders needed capital to execute their vision. At first, they continued to build software for clients to fund product development. 

Their first offering was a software-as-a-service platform to run the operations of small and medium banks who couldn’t afford to buy expensive solutions from abroad or maintain their own complicated, expensive IT infrastructure. It took three years to build. “Over time, the revenue from the product kept going up, and the business activity on services kept going down until we shut it off and became a pure product company,” explains Obi. 

By 2014, AppZone was focused full-time on its products and began to innovate and expand its offerings. An infusion of capital from a South African investor helped fund this growth. 

Surviving a startup near-death experience 

AppZone continued to thrive until the pandemic hit and created a major crisis that would eventually put Obi and Wale on the path to their current success with Zone. The company’s initial South African investor was acquired by a larger company that wanted to exit the investment. Obi and Wale found another investor to help them fund a buyout and then lined up further investors to fund additional growth. Then came Covid. 

The company was almost out of runway while a global pandemic raged. The situation looked dire, leading to many stress-filled days and sleepless nights for the team. Luckily, the story has a happy ending. They were on the brink of losing the company when they located another local investor. 

“We raised $10 million, which helped us invest in product development,” says Obi. One of the products that they ended up building was Zone.

Their initial idea was for a customer-facing payment solution, an app, which meant connecting to another payment network to process the transactions.

“We saw that those networks were unreliable and expensive. So we started asking ourselves, how can we build a payment network that can be a lot more reliable with a lot less friction?” reports Obi. The solution they landed on was blockchain. Obi and Wale spun off Zone from AppZone’s other business, which continues to be run by Emeka, to pursue the opportunity.

Through this decentralized technology, banks can connect without going through a central entity. Blockchain promises to make payments quicker, safer, and more efficient, but the challenges of making the product work weren’t just technical. They were also regulatory and reputational. 

Zone needed a “payment switch license,” which is basically an OK from regulators to connect banks together. It also needed banks to sign on, not just the smaller banks Obi and Wale had with AppZone’s SaaS product but the country’s largest financial institutions.  

Here’s where the co-founders’ decades-long engagement in the sector paid off. Through their work building custom software for banks, they had established trusted relationships with most of Nigeria’s biggest financial players. “They knew us. We had a track record. So when we wanted to do Zone, they could trust us better than a new fintech nobody had ever heard of. Banks would never do that because it’s too risky,” Obi stresses. 

A vision for a borderless, instantaneous, frictionless future 

With that institutional trust and regulatory approval in hand, Obi, Wale, and their team began to build Zone as it exists today, a fully licensed, decentralized, blockchain network that helps banks process payments across borders and in whatever currency (or digital currency) their customers prefer. Since 2021, the company has secured 16 banks in Nigeria, including 6 of Africa’s top banks. Zone also achieved 1000% growth over a 4-month period since the commercial rollout.

But this is only the first step in a larger transformation of payments—and perhaps eventually even the entire banking sector—envisioned by Zone. The latest $8.5 million in funding will be used to build out the company’s vision for borderless, instantaneous, and frictionless payments, not just in Africa but worldwide.  

Borderless and instantaneous are just what they sound like. Anyone can send money anywhere without delays. Frictionless, Obi explains, “means it works. No failure, support issues, fraud, chargebacks, trying multiple times, or getting charged twice.”

The ultimate aim is to make sending money as simple as sending an email. “If you want to send an email, you don’t need to know where or whose ISP they use. You don’t need to know which PC they’re using, whether it’s Mac or Dell or HP, or which operating system they’re using. It should be the same experience for payments,” he insists. 

“Money would become digital, more like Bitcoin today,” says Obi. We see a world where money evolves to sit on the blockchain, and the financial services that utilize that money will be a new form called decentralized financial services that are fully automated. It’s like you have robots on the blockchain that are providing financial services in a way that is safe, transparent, low-cost, very innovative, and far superior to what you have today in traditional finance.” 

This transformation could potentially be global. Zone plans to leverage the relationships of its existing clients to expand further within Africa. Meanwhile, Obi and Wale are using their status as Endeavor Entrepreneurs to build relationships with other fintech firms as they see expansion opportunities in developing countries in Latin America, Asia, and the Middle East. Planned partnerships with Visa and Mastercard will enable credit card users across the globe to authorize payments initiated on the Zone network. 

With a vision this compelling it’s no wonder the company’s latest fundraising round proved popular with investors, even in the current dismal climate for raising capital. Ask Obi how he feels about having the chance to build this future, and his answer boils down to a single word: “grateful.”  

“We know that the investment environment is tough. Investors are not really investing right now in many fintechs, especially in Africa. So, the fact that we have this level of interest and excitement from investors shows a strong belief that what we’re building can truly transform the financial landscape. It’s a vote of confidence in us and our ability to execute it. We’re super grateful,” he concludes.

Wale and Obi are now focused on living up to that confidence and executing their big vision, setting up their next 20 years and transforming finance to be even more interesting than the first 20. 

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