Stax, a fintech startup focused on simplifying financial transactions in Africa, has raised $2.2 million in a seed extension round. The investment was co-led by U.S.-based venture capital firms World Within Ventures and Noemis Ventures, alongside Anthemis Group, Orange DAO, 500 Startups, Garuda Ventures, and GAN Ventures.
In Africa, while internet-based banking apps serve millions, the continent still largely depends on USSD (Unstructured Supplementary Service Data) technology, which is predominantly used by feature phones. USSD connections exceed 850 million in sub-Saharan Africa, far surpassing smartphone internet banking. This technology allows users to make transactions such as sending money, paying bills, and buying data even without internet access. However, it faces challenges, particularly with users managing multiple USSD codes across different accounts, especially in countries like Nigeria where the average person holds multiple bank accounts.
Stax aims to solve this by consolidating multiple USSD codes into one easy-to-use app, enabling users to manage their finances offline. The app integrates various bank accounts, mobile wallets, and even cryptocurrency, making transactions seamless for users who prefer to operate without mobile data.
“Our goal is to provide a simplified way for people to access and manage their finances without relying on multiple USSD codes,” said Ben Lyon, CEO of Stax. “We are targeting the 300 million smartphone owners in Africa who still prefer using USSD technology over data-heavy apps.”The app currently operates in 10 African countries, fully supporting six—Kenya, Uganda, Tanzania, Nigeria, Ghana, and Ethiopia. With more than 100 banks and mobile money accounts integrated, Stax has grown rapidly, accumulating over 170,000 users, with 40,000 active monthly users.
Despite USSD’s offline benefits, the technology has vulnerabilities, such as the potential for hackers to exploit data. Stax’s approach aims to minimize risk by requiring minimal permissions from users—only access to messages, contacts, and phone calls. Lyon emphasized that the company values user privacy and doesn’t collect personal data, aligning with its goal of providing a utility app without advertisements or data cross-selling.
Stax was initially founded as Hover, an API platform designed to make USSD technology programmable. However, after pivoting to focus on consumer-facing services, it rebranded to Stax and now plans to expand its service offerings. These include a self-custody cryptocurrency wallet to allow users to buy airtime via USSD codes.
The recent seed extension will enable Stax to roll out new features and expand from 10 to 50 countries across Africa. The company is also considering global expansion into other regions where USSD usage is significant, such as South and Southeast Asia, but this will come at a later stage.
