Canza Finance, a Nigerian cryptocurrency startup focused on simplifying cross-border settlements in Africa, has secured $2.3 million in funding to fuel the development of its decentralized finance (DeFi) products, including the recently launched Baki.
Polychain Capital led the round, with participation from notable investors like Protocol Labs, Avalanche's Blizzard Fund, 99 Capital, Stratified Capital, and Hyperithm. This marks a significant boost for Canza, following its $3.27 million seed round in 2020.
Founded by Pascal Ntsama and Oyedeji Oluwole, Canza launched in 2020 with the mission to tackle the inefficiencies of cross-border trade in Africa. Initially, the startup catered to businesses struggling with foreign exchange access by facilitating international settlements using cryptocurrencies.
Collaborating with on- and off-ramp partners, Canza partnered with local foreign exchange agents, known as "Aboki," to enable businesses and individuals to settle payments for goods and services through seamless crypto conversions. Baki, Canza's flagship product, further simplifies currency exchange for businesses by offering dollar swaps at significantly lower fees compared to traditional forex channels.
Beyond Baki, Canza boasts a diverse DeFi product portfolio, including the jollof.fi protocol and CXDS for creating credit default swaps. The company also has plans to launch an over-the-counter (OTC) trading platform for FX and crypto ATMs for convenient on-ramps and off-ramps.
Canza's revenue model currently relies on a 1% transaction fee, but Baki's innovative on-chain protocol aims to drastically reduce costs to just 0.2%. The startup currently facilitates around $2 million in weekly transactions across its key markets of Senegal, Nigeria, Cameroon, and the United States.
With the fresh funding, Canza is prioritizing infrastructure development and regulatory compliance across Africa. "Our focus is on expanding infrastructure and obtaining necessary licenses in suitable jurisdictions," says Oluwole. "This will not only strengthen our operations but also drive the growth of our DeFi infrastructure products."
This move aligns with the burgeoning crypto landscape in Africa, where countries like South Africa are implementing licensing requirements for crypto service providers. In Nigeria, the Central Bank recently lifted restrictions on crypto bank accounts, highlighting the evolving regulatory landscape for digital assets.
Canza's success in securing funding and its focus on regulatory compliance position the startup as a key player in driving Africa's DeFi revolution and revolutionizing cross-border transactions across the continent.
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