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One startup is banking on the fact that businesses are eager to earn as much interest as possible on their cash.

Mayfair is a new fintech startup that offers businesses up to 4.02% APY, a number it claims is among the highest out there. How a startup that is barely two years old able to offer such a high interest rate to businesses goes back to its partners. Mayfair itself is not a bank, but rather a fintech company that offers FDIC-insured products through an Arkansas-based bank called Evolve Bank & Trust. The money is actually moved by Stripe via its technology into an account at Evolve, with Stripe holding the ledger.

“We’ve tied all that together,” said Mayfair co-founder and COO Munish Chopra.

Chopra and Daniel Chan had worked at private equity hedge funds for most of their careers and grew frustrated by not being able to put any of his own money to work “for decent yields, with the average savings account for businesses paying 0.3% in interest.”

“And we didn’t want to take any risks with our money either,” said Chopra, who previously worked as managing director of Triton Partners.

The pair teamed up with serial entrepreneurs Kent Mori andKevin Chan in February 2021 to start a company, exploring different business models before settling on Mayfair’s current offering.

Beyond providing access to higher interest rates, Mayfair says its software gives businesses a way to choose how much they need for operations and earn yield on the rest via automated cash management.

“On a daily basis, we’ll rebalance your accounts to make sure that if you’ve got say, more than half a million in your operating account, we’ll move that into the cash account so that it can earn maximum yield,” Chopra said. “And if you dip below that, then we’ll top up your account so that you always have the half a million bucks that you need for your operating purposes.”

Notably, Mayfair managed to raise $10 million in venture funding across a $2 million pre-seed and $8 million seed round before it had even settled on its current concept. The raises took place before the downturn that has hit the startup world began in full force, with the seed round closing in April of 2022 in conjunction with the closing of a $4 million debt line. Amity and BoxGroup co-led Mayfair’s pre-seed financing. Tiger Global, led by John Curtius (who has since departed the firm), led the company’s seed raise with Amity and BoxGroup also participating.

“As we were going around and trying to figure out what our options were, it turned out that if we pushed hard enough and negotiated hard enough, we could get far better [interest] rates, and we could develop far better partnerships,” Chopra told TechCrunch in an interview. “So as we were doing that, it became obvious to us that actually we were supposed to start a company that makes that rate available to others, whether they’re startups, or more successful companies…That’s obviously a very sensible thing for people to do with cash, especially now when there’s trouble with inflation and everyone’s downsizing and needs to do something with their cash.”

Mayfair went live with its offering in late 2022, and is emerging from stealth with “dozens” of customers, including freight logistics startup Factored Quality, on its platform.

“Some of them have very small balances, like tens of thousands of dollars,” Chopra said. “Some of them have tens of millions of dollars. And it’s not limited to the U.S. either.”

In the short term, Mayfair is eager to line up more partner banks and build out more products. The company believes that it can attract banks as partners by pledging to deliver a higher amount of deposits than they would get on their own.

“They don’t have to pay to have a marketing force or for distribution,” Chopra said. “We’re doing that effectively, and then handing them a pot of cash. If they had to borrow overnight, they’d have to pay more.”

Evolve pays Stripe. Stripe in turn pays Mayfair and Mayfair pays its customers, keeping what Chopra described as a small cut. Down the line, the company is planning to charge for certain functions related to cash management that is not yet built out. Chopra said the company doesn’t view fellow fintech Mercury as a competitor (that company too is partnered with Evolve), and views its services as “complementary.”

Presently, Mayfair has 12 employees. It is using its funding toward hiring, with a focus on engineering, product and design.

Patrick Yang, founding general partner of Amity Ventures, told TechCrunch via email that he was drawn to the caliber of Mayfair’s founding team.

For example, Kevin Chan also founded Headway, which has raised over $100 million from investors such as Andreessen Horowitz, Accel, GV and Thrive. Meanwhile Dan Chan founded JANDI, which is dubbed the Slack of Asia.

“I’ve known the team for many years before investing and was drawn to their ability to execute and the speed at which they’ve been able to ship quality products that are being used at scale. They have a massive vision to be an end to end finance platform for fast growing companies that includes management and automation around treasury, finance, accounting, and operations,” Yang told TechCrunch. “As an investor in Carta, I see a similar path for Mayfair to being a vital part of every business starting with treasury management as Carta did with cap table management.”

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Backed by Tiger Global, Mayfair emerges from stealth to offer businesses a higher yield on their cash by Mary Ann Azevedo originally published on TechCrunch

Africa is seen as the next trade frontier, following the coming into force of The African Continental Free Trade Area (AfCFTA), which created the single largest unrestricted trade region in the world. However, while trade liberalization is meant to spur intra-regional commerce, its take-off is dependent on key infrastructure investments to ensure supply chain efficiency. More progress is linked to how quickly market information circulates to key stakeholders including traders, regulators and financiers.

Realizing emerging opportunities, Xetova, a Kenyan startup, is deploying technologies that make information on market opportunities accessible to traders. It is now building a network of large, medium, and small enterprises, which will be tapped to draw insights and foresights on market opportunities and risks.

“We are building a trust network that, for example, allows a company in Kenya to know who to work with in a country like Nigeria, South Africa. This trust network can only be built with the ability to collect verifiable data,” said Bramuel Mwalo, Xetova founder and CEO, adding that his company is working on the largest trade intelligence and supply chain support network.

To ensure that trade trends, reports and highlights are authentic, Xetova, which was founded in 2019, is positioning its network on data from its insights service, which businesses use to interpret data on supply chains, spend, revenue, and general management performance into actionable insights.

The insights service is the first in Xetova’s suite that clients sign-up before subscribing to others that include trade financing and linkages to wide trade networks.

Mwalo’s interest in African trade was driven by research he was part of that showed that entrepreneurs have a high chance of success if they gain access to large procurement deals and less fragmented distribution channels.

“That finding made me curious about B2B trade, large supply chains, and how entrepreneurs in Africa access large procurement opportunities. I developed this theory that data can significantly drive trade and how businesses access opportunities, manage risk and relate to each other,” said Mwalo.

“Then my PhD thesis explored ways of getting B2B data accessible in the sense that everybody in Africa who’s trying to do business should actually access data on opportunity, and risk and network. This information should be readily available to the market and where it is available, it significantly changes how trade is done, because at the end of the day, we perceive risk differently,” he said.

Mid his studies, Mwalo took time off to join Kountable, a financier that provided loans to SMEs that are locked out of formal institutions because of lack of collateral.

In his two years as a Kountable executive, he says, they financed $32 million worth of deals, supporting 200 entrepreneurs in several countries including Kenya and Rwanda. It, however, proved hard for them to scale lending, even with a $150 million line of credit, due to lack of verifiable data on the operations of many enterprises.

“Initially, business went really well, and the uptake was fantastic. The challenge came when we needed to scale beyond the 200. Every time we started engaging businesses outside our network, we lost money. Their needs were growing too fast, faster than our ability to do due diligence,” Mwalo said.

“That point is when I realized the biggest issue in trade within Africa is not capital, it is information asymmetry in terms of where value, security and returns are,” he said.

This experience drove him to launch Xetova to ensure that businesses understand and unlock the value of the data they possess, use it to inform solutions for their challenges, and demonstrate how it can be harnessed at scale for trade intelligence that can open up new partnerships and bigger markets. This is in addition to making it possible for businesses to access loans based on their own data and insights, which are used by lenders within Xetova’s networks to offer tailor-made loans.

Besides serving enterprises, Xetova counts government agencies among its clients, with whom it is working to improve efficiency in healthcare. For such entities it provides insights on consumption, distribution, procurement spending, supplier and payment performance.

The company claims to have booked $2.45 million in revenues by December last year, and facilitated trade finance to the tune of $7 million.

Xetova is looking to grow its clientele base from the current 60 large enterprises to 300 in the next 18 months.

The firm is targeting to sign up 10 major distributors in Africa, to increase access to over 10 countries from the current seven, and to facilitate $20 million in trade finance.

Xetova, which raised $4 million in an equity-debt seed round last year led by South Africa’s TRT Investments, is also launching a fellowship program for potential investors.

Xetova exploring market data gaps in Africa to boost trade insight access by Annie Njanja originally published on TechCrunch

Africa seemed to defy the global venture funding decline in the first half of 2022 after its startups raised $3 billion, double the amount secured over a similar period the previous year. However, the VC market correction caught up with the continent in the back half of last year, when ticket sizes fell and fewer deals closed as investors tightened the purse strings.

VCs now predict that the funding slowdown in Africa will be sustained in 2023 as investors continue to pull back, making it harder for new and existing startups to raise capital.

“With the global economic slowdown trickling into 2023 due to inflationary pressures and tightening monetary policy, investors on the continent will maintain a judicious approach to investment and African startups will continue to find fundraising challenging,” said Bruce Nsereko-Lule, a general partner at Seedstars Africa Ventures.

As a ripple effect, the operating environment for startups is expected to worsen this year, leading to a surge in layoffs, scaling down of activities, down and bridge rounds, and business shutdowns, continuing the trend that picked up at the end of 2022.

Mega-rounds are expected to be scarce, too, as was the case in the last half of 2022, when no deals over $100 million were signed, according to The Big Deal, a database of publicly disclosed deals. Overall, six mega-rounds were closed last year (all in the first six months), half of the number of such deals closed in 2021, when VCs invested record amounts.

Africa predicted to experience sustained funding slowdown in 2023 by Annie Njanja originally published on TechCrunch