[HN Gopher] Launch HN: Lemonade Finance (YC S21) - Digital Bank ...
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Launch HN: Lemonade Finance (YC S21) - Digital Bank for the African
Diaspora
Hello Hacker News! Rian and I are co-founders of Lemonade Finance
(https://lemonade.finance). Lemonade is a digital bank for the
African diaspora. There are over 20M African immigrants in North
America and Europe and many are running some form of business back
home. We provide multi-currency accounts to help them manage their
unique banking needs. Rian and I have worked together over the
last several years helping to build African fintechs such as Opay
(in Nigeria) and Okash (in Kenya). As directors of operations and
finance, we were instrumental in scaling Opay from $0 to $2B
monthly transactions. It stood out to us that Africans can pay up
to 30% more than the global average to move money abroad, and most
African countries are only enabled to receive, and unable to send.
Looking further, we discovered that remittance (sending money back
home) wasn't enough for the diaspora--a lot of them run one or two
businesses back home. There's limited access to African currencies
abroad, it's difficult to open and maintain accounts back home,
getting money out of Africa is a challenge, and the size and
frequency of their transactions is much greater. We issue bank
accounts to our users in both their country/currency of origin as
well as in their country/currency of residence, and provide them
with the tools to manage both their personal and business banking
between continents. We integrate and build open banking APIs in the
countries we operate, manage floats across countries, and obtain
the licensing that enables our users to store or move money across
borders. 8 of the 10 fastest growing international migrant
populations are African. The African diaspora represents a $10B
market opportunity. We launched 10 months ago and are currently
processing $5.5M per month and made $23k in monthly revenue in
July. We are licensed to provide our services in the US, Canada,
and the UK. We are really happy we get to share this with the
Hacker news community. Please let us know your thoughts and
questions in the comment section below.
Author : ridwan_olalere1
Score : 62 points
Date : 2021-08-27 15:39 UTC (7 hours ago)
| slownews45 wrote:
| Some african countries don't really have proper currency freedom.
| I know in Zimbabwae they have currency auctions, but there
| remains a large spread between these supposedly market based
| auctions and black market rates. Not sure how South Africa
| handles wiring large amounts out of the country - sometimes
| things need central bank approval etc.
|
| Anyways, an interesting space and if it solves pain points then
| even better - you'll have a success on your hands (not everyone
| wants to work with these govt agencies directly).
| riancochran wrote:
| This is the grind
| missedthecue wrote:
| Why did you call it Lemonade?
| pk455 wrote:
| How does this compare to SendWave?
|
| Also, what's your strategy around combating fraud?
| riancochran wrote:
| 1) Sendwave only provides remittance into Africa (among other
| continents), but you can't bring funds out of Africa via
| Sendwave. 2) That's all Sendwave does, just that one service.
| 3) We offer user's accounts in their country of origin (KES for
| a Kenyan), plus an account in their country of residence (USD
| if now residing in the US). Then we allow for instant
| interaction between the two (so users can send money out of
| Africa), as well as other services, plus other services to
| come.
| riancochran wrote:
| Users will also eventually have the freedom to hold the
| currencies they want rather than just two as described above.
| Afeez wrote:
| Fantastic product to founder market fit. OPay is now worth a
| staggering 2 billion dollars with over 3 billion dollars in
| monthly payment value. For a 3 years old startup, thats a great
| fit! For so long incumbent startups and banks have refused to
| cater to the needs of Africans in the diaspora. Would be
| fantastic if the current product can evolve to an actual digital
| bank. Godspeed team.
| mint2 wrote:
| Have you thought about name conflicts with lemonade insurance?
| Both you and them are financial products? Do you have prior claim
| in the US and can go after them? If not, then you may want to
| look into any potential issues there early rather than later.
| nestorD wrote:
| I first though Lemonade insurance had decided to diversify
| their offers. So definitely a name clash.
| dsizzle wrote:
| Same. In fact, Lemonade has a charity component and here is
| highlighting a project they did in Africa.
| https://socialfintech.org/lemonade-b-corp-insurtech/ That
| site is focused on "FinTech" too.
| riancochran wrote:
| Considered. Certainly something to keep an eye on but we are
| still miles apart with our offerings.
| mint2 wrote:
| Good to hear. I'm not an expert on the topic, but seeing what
| some companies lawyers do like backcountry.com made me a bit
| concerned for you. backcountry.com was really without merit,
| just more lawyers. Backcountry.com even went after coffee
| shops with the word, a totally unrelated area.
| [deleted]
| haasted wrote:
| How do you handle KYC and AML?
| riancochran wrote:
| We have a partner that we use for verification, AML, sanction,
| PEP checks during onboarding.
| unixhero wrote:
| How do you support crypto currencies?
| riancochran wrote:
| None yet. But we'd like to support it eventually. We need to be
| careful navigating the regulation there.
| Hidayyah wrote:
| It's awesome! I came across Lemonade finance few months ago and
| their service has been satisfactory. Great job guys!
| idworks1 wrote:
| Is there a place where we can find the list of supported
| countries? If this supports Guinea and Senegal, you got yourself
| a customer.
| riancochran wrote:
| We only onboard users in Canada today. But we are finalizing
| integrations to launch in the US and UK. We support the
| Nigerian communities first with Kenya coming next.
| 7b64f0f2 wrote:
| Nice ! What are your plans for supporting other currencies ?
| Specifically Europe Union and Maghreb countries
| riancochran wrote:
| We will support EUR and GBP soon. They are already and option
| as a sending currency. But they will also become available as
| an account currency soon.
| kle wrote:
| > the majority are running some form of business back home
|
| majority, as in >50%? is this really true?
|
| I'd love to know more. What are these businesses and are people
| using them to finance their living in NA/Europe?
| riancochran wrote:
| There's a convergence of consumer and business here. Even a
| home owned and leased out in a country of origin drives demand
| for services that aren't offered by today's financial
| institutions. Also, as you suggest, many immigrants export cars
| and other physical products home to subsidize their salary
| where they now reside.
| dang wrote:
| I've replaced "majority" with "many" in the text above, since
| that's just as good for making the key point. If someone comes
| with a compelling citation we can change it back :)
|
| (Your comment is great, I just needed a place to hang this
| moderation announcement!)
| ComodoHacker wrote:
| People are using them to provide a decent living for their
| families and relatives in their home country.
|
| A year or half of savings is often enough to start a business
| in a poor country.
|
| Just have heard a story today of a truck driver in US who
| helped his relatives open and run two medical clinics in his
| hometown (not Africa).
| lastofthemojito wrote:
| I was surprised by that quote too, but there are definitely
| some interesting hustles going on:
| https://www.nytimes.com/2019/12/30/nyregion/amazon-delivery-...
| riancochran wrote:
| Hadn't see this article, but this is a great example.
| mattfrommars wrote:
| Great stuff! I've been watching fintech and its really pulling my
| interest in. Fintech are on the rise
|
| https://news.crunchbase.com/news/europe-fintech-unicorn-star...
|
| I have tons of questions to ask but no sure the best medium.
| Like, how does one start a remittance startup from scratch as a
| software developer? My knowledge is limited to stock and trading
| in financial space. Should I pursue CFA to get a idea of
| remittance industry and get my share ?
|
| Or, say you are from Panama and want to start a mobile banking
| startup - a clone of Alipay - transaction via QR codes only, how
| do you get up to speed with it?
| riancochran wrote:
| I'd advise you begin by understanding the regulation in the
| markets you want to service. If this is just Panama, and you
| want to begin with domestic interactions, then understand what
| license, if any, you need in order to process payments or hold
| funds on behalf of your users.
| temitope23 wrote:
| Fire product, I used it to send money to the uk and Nigeria. It's
| really fast. Good job guys
| drewpc wrote:
| Wow, this is fantastic--congratulations! Are you able to make
| money transfers free for the account owners?
|
| This problem set reminds me that The Philippines has a similar
| problem with their "Overseas Foreign Worker" population
| (estimated at 2.2M people) that works overseas, primarily in the
| Middle East, in order to send money back home.
| riancochran wrote:
| Yes. Certainly a challenge for most immigrant communities.
| Plenty of opportunity outside of the African diaspora
| nnash wrote:
| The African Diaspora refers to the descendants of slaves taken to
| the New World and elsewhere not first generation immigrants who
| left by choice. I'd suggest revising your value prop to stop
| coopting language meant for different peoples.
| init wrote:
| Congratulations from a fellow African! Looking forward to your
| success!
|
| Moving to the US and Europe was a shock for me. It is hard to
| send money to my home country. If a relative back home needs
| money within two weeks I usually have to ask other people to send
| money on my behalf or I have to ask other relatives back home to
| help them until I can pay them back. This is constant source of
| stress when you have a poor family.
|
| I ended up quitting my job in another domain to go work in
| Fintech with the ultimate goal of solving this problem.
|
| Some issue that make it hard for me to send money:
|
| * Transfer fees are very high for both bank transfer and
| remittance services.
|
| * The large remittance services like Western Union and MoneyGram
| have draconian processes to the point that they can just block
| your transfer with no clear explanation and on multiple occasions
| they even blocked all customers from sending money to my country.
|
| * Only one bank back home has online banking services and they
| have lamentable security practices.
|
| * Many banks in the west don't let me send money back home. If
| they do then they require you to physically go to a branch and
| prove your identity. This was/is a problem during the pandemic.
|
| * You can only send up to a certain amount. Too little, it gets
| eaten away by the transfer fees, too high, they don't let you
| send it unless you give them a sob story and they feel sorry for
| you and approve it just this one time.
| riancochran wrote:
| We can relate. All of this is solvable.
| Yenrabbit wrote:
| > You can send money to Nigeria, Ghana & Kenya
|
| Do you have a plan for which countries you'll support next? And
| any you think will never be supported?
| riancochran wrote:
| Really too early to say.
| usgroup wrote:
| That the majority of a 20 million strong diaspora are running a
| business is pretty surprising if it is true.
|
| Wonder what the consequences would be if spread(BTCNGN) <
| spread(USDNGN), where NGN is the Nigerian Naira as an example.
| dang wrote:
| (I've since replaced 'majority' with 'many' in the OP - see
| https://news.ycombinator.com/item?id=28331634.)
| lifty wrote:
| Bitcoin is already used as a payment rails from USD -> BTC
| (lightning) -> NGN, using Strike wallet and Bitnob. But I don't
| know how much the spread is.
|
| Edit: correction, "already used" is too strong. This is a very
| new feature on Bitnob's side.
| [deleted]
| atlasunshrugged wrote:
| This is super cool but can you help a newb understand why I
| couldn't use a Revolut or something like that which lets me hold
| a basket of different currencies? Or send money back and forth
| with Transferwise?
| riancochran wrote:
| Hi. Good question. Revolut, Wise, etc, doesn't support native
| african currencies, nor do they support the flow of funds from
| Africa to NA or Europe.
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(page generated 2021-08-27 23:01 UTC)