Cowrywise, the growing fintech startup that allows users to digitally manage their wealth as well as financial planning solutions has raised $3 million in pre-Series A funding. Quona Capital led the round as Tsadik Foundation, Gumroad CEO Sahil Lavingia, and a syndicate of Nigerian angel investors locally and in the diaspora participated, According to TechCrunch. Cowrywise had previously raised more than $500,000 through a combination of equity financing and grants.
Founded in 2017 by Edward Popoola and Razaq Ahmed, Cowrywise has grown rapidly. They started with a savings feature and now aim to provide wide-scale investment opportunities. The idea for Cowrywise came when CEO Razaq Ahmed was an investment analyst with Meristem covering equities and making recommendations to retail and wealth management clients. He noticed that existing investment management firms in the country focused on the top 1 percent.
Wealth management had been strange to many Nigerians because the existing players were not built for the mass market. That has always been a problem we felt required a solution.Ahmed told TechCrunch.
The company aims to meet a demand for capital preservation and wealth building as the Nigerian economy contracts. Traditional wealth management firms want big tickets only, leaving a market of tens of millions of small and medium earners hanging. This divide has allowed digital players, who understand how small sums can compound, to get into wealth management, TechCabal Reports.
With the introduction of its mutual funds’ products, the company currently has 19 different mutual funds and at least 20% of the total mutual funds in the country are listed on its platform. Ahmed claims this is the largest portfolio of mutual funds a single entity has in the country. These assets cut across five investment partners, and they allow users to save and invest with as little as ₦100 ($0.25). The partners include United Capital Asset Management, Meristem Wealth Management, Afrinvest Wealth Management, ARM Investment Managers, and Lotus Capital. Cowrywise indirectly charges customers for this service and splits the fee with the mutual fund partners but the CEO doesn’t disclose how much.
Our mutual fund partners clearly recognize the value of being part of an inclusive digital platform that allows retail investors to invest regardless of faith or financial status.he said.
Razaq Ahmed, Cowrywise’s CEO, told TechCabal that the app has 220,000 registered users and aims to have 10 million registered users by 2025. Its target is a fraction of the 20 million people who, according to 2015 records, have bank accounts in Nigeria.
We want to remove the barriers by making mutual funds and other investment options accessible. You can start investing in a few minutes. Our platform is transparent and you can see your investments on the go. We are going to be the biggest basket of mutual fund variety in the country.Razaq Ahmed told TechCabal
By giving licensed money managers access to its API, Cowrywise will enable its users to switch from one mutual fund to another without leaving the app. It sounds simple, but it could be a game-changer as SEC’s new rules squeeze out bad investment actors like MBA Forex that promise a fortune and leave customers hanging.
According to TechCabal, Quona capital’s thinking is that Cowrywise can capture a generation of users who want more than an uninspiring economy provides.
Cowrywise’s unique approach to wealth management and financial planning through an accessible mobile platform increases financial resilience for Nigerians in a way that we believe can have a positive impact in the long-term. We are excited to support this team and make our first Nigerian investment in Cowrywise.Johan Bosini, partner at Quona Capital said,