For freelance professionals in Nigeria, such as software engineers working with U.S. firms, converting dollars to naira has traditionally been a cumbersome process. The typical reliance on Bureau De Change (BDC) services or third-party exchanges often involves inflated rates, limited accessibility, and the risk of fraud. Addressing these challenges is Grey, a fintech startup offering innovative forex solutions that simplify currency exchange and cross-border transactions.
Formerly known as Aboki Africa, Grey rebranded to create a more globally appealing identity. The company launched in July 2020 as a platform to instantly exchange foreign currencies to naira. Recently, Grey has been accepted into Y Combinator’s Winter 2022 startup batch and secured pre-seed funding from investors including Ingressive Capital and Abdul Hassan, CEO of Mono.
Solving Forex Challenges
Grey was co-founded by Idorenyin Obong and Femi Aghedo. Obong’s experience working remotely for international companies exposed him to the inefficiencies of Nigeria’s currency exchange system. “It would take an entire day to withdraw dollars from a domiciliary account, find a BDC operator, and complete a transaction,” Obong explained. Grey was built to eliminate this inefficiency by enabling seamless forex exchange between domiciliary and local naira accounts.
The platform initially operated as a bridge between users and offline BDC operators. However, customer feedback revealed a broader issue: receiving international payments into Nigerian domiciliary accounts remained complex and time-consuming.
Pivot to Virtual Bank Accounts
In July 2021, Grey introduced virtual international bank accounts in USD, EUR, and GBP. These accounts, domiciled abroad, are not bound by Nigerian banking regulations, allowing users to receive funds quickly and convert them into naira. Customers can also use Grey to send money to Europe or the U.K. by depositing naira and converting it to euros or pounds.
Grey’s pivot has resulted in significant traction. The startup processes over $1 million in monthly transactions, with a 1% transaction fee capped at ₦3,000 (~$6). From December 2021 to January 2022, the platform saw a 36% increase in monthly users and a 64% boost in revenue, reaching over 12,000 active users.
Competitive Landscape
Grey’s services align with a growing fintech trend in Africa, where startups aim to streamline international transactions for individuals and businesses. Competitors include PayDay and Fincra, which also offer virtual foreign bank accounts to simplify global payments.
Grey plans to enhance its offerings by introducing mobile apps, catering to the demand for more accessible services. Additionally, the company aims to roll out virtual and physical foreign-denominated cards, further empowering users with versatile payment options.
With Y Combinator’s support and its innovative approach to forex exchange, Grey is poised to reshape Nigeria’s financial landscape, making cross-border transactions seamless and efficient for thousands of users.
