Last year signaled the turn of the decade and introduced a whole new way of doing things across all sectors. The Covid-19 pandemic has led to a rapid increase in digitalization. More online sharing and collaboration platforms, as well as online payment solutions are cropping up every other month.
Innovations in the Fintech industry in particular have been making huge waves all around the world. With the growth of the ‘gig economy’ in Nigeria where people sell their skills to both local and foreign companies as independent contractors, there is a rising need for better, faster, more cost-effective cross border payment platforms to send and receive money.
Traditional money transfer services like Moneygram and Western Union are way expensive, take longer to release funds and are generally inconvenient. Crypto remittance companies have emerged to fill in this need. With just an application, and from an e-wallet, people can convert money into crypto and send it to the wallets of people in other countries who can then convert it back to crypto if they so wish.
This solution is the idea behind Flux, an app developed by Blue Loop, a Fintech companies founded by four young Nigerians — Ben Eluan (CEO) , Ozesele Orukpe (CTO), Israel Akintunde (VP, Engineering) and Ayomide Lasaki (Head of Marketing). In 2019, Eluan and Orukpe had done a job for a client in the UK and were paid through Skrill, but the funds took several days to drop, and they lost a considerable percentage of it to high charges.
This inspired them to build a solution that would ease payments not just for people in diaspora who want to send money back home, but also for merchants and freelancers offering services to people around the world. They decided the best way to implement this was to use crypto currency. So they took courses in Blockchain and KYC. After going through a rigorous process, they were able to find an exchange to provide liquidity.
Flux was eventually developed in April 2019 and a prototype was ready for testing in February 2020. It integrated crypto in August, going live in September. The app has over 5,000 downloads on Google Play Store. Remittances can be received through Flux ID, crypto wallet or QR code using cryptocurrency like Bitcoin, USDT and Ethereum. Users can also buy, sell and deposit into their crypto wallets, as well as use the bank transfer feature to load airtime or pay bills.
In May 2020, Blueloop got accepted into Pioneer, an accelerator launched by an ex-YC partner Daniel Gross. Pioneer gives founders access to funding and talent hardly found out of Silicon Valley. This helped them pitch Flux to an international audience, further improving their prospects of getting more funding. After the program, the company raised $77,000 Pre-seed investment from different investors – Hustle Fund, Pioneer, Mozilla, and other angel investors.
Blueloop is also one of the Nigerian startups to be accepted into the YCombinator 2021 winter program. They will receive $125,000 in funding which would be used to further develop their products. The young company has rapidly grown, despite CBN’s ban on crypto exchange activities. Its customers couldn’t convert their crypto to fiat, and this is why the next phase of Flux development will be making the app available in the US and UK, where people can use Flux to send money to Nigeria.
The team is also working on a peer-to-peer feature where users can seamlessly transact crypto and fiat with one another. It has already launched Flux Merchants, a product that allows merchants to accept payments by creating payment links for their products and services.
Eluan has said that Blueloop has a product-based mantra and it keeps implementing feedback from users to develop its product. To address the issue of Internet Connectivity in Nigeria, Eluan says his team is developing an SMS based technology so transactions can be done offline. Unlike USSD, SMs BASED payments are quite rare and requires a lot of effort, but Eluan remains confident in his team.
The four young entrepreneurs actually met in their undergraduate days while in Obafemi Awolowo University, Ile-Ife. They formed a programming club where they met to write codes. Before developing Flux, they had built an e-commerce platform called Joppa that helped people find merchants around them within the city. Although they had about 20,000 users, the business soon had to shut down because they didn’t really understand the dynamics of how to run a business.
OAU alumni have launched prominent start-ups such as Jobberman, Kudi, and Cowrywise. These achievements were also a huge inspiration for the four friends to also build their platform. They dropped out of school though, to focus on their business and have been successful in scaling it into a $1 billion company. Not only are they the first school dropouts to get into Y Combinator, but they are also the youngest. This feat, according to Eluan, is a landmark achievement and he believes it will open more doors for young aspiring African founders.