SVB Collapse Spurs African Startups to Turn to London-based Fintech Startup Verto

On the 10th of march, 2023, Silicon Valley Bank  announced its closure making it the second largest bank collapse in the history of the United States and the first since the 2008.

Following this recent Collapse, startups in Africa have been scrambling to find other banking options for the support of their businesses. One of the banks that has now caught the attention of these startups and gained some traction is Verto, a fintech based in London but is founded by Nigerians.

Before its collapse, SVB was said to have about 250 startups from Africa and the MENA region, according to data from Verto, and out of these, Verto said it is onboarding 60 companies, which include Jumia and Chipper Cash.

ENTER VERTO:

According to the company “Verto is a global financial technology firm that enables businesses of all sizes to access enterprise grade cross-border payments, FX and banking solutions via an advanced platform or API. Businesses can accept payments and send payouts globally in one single platform. Verto seamlessly connects any business, anywhere.”

This fintech startup has experienced an increase in the number of interested African startups coupled with the 60 clients onboarded as former SVB clients. One of Verto’s primary services is cross-border payment which is quite important to startups that frequently have to handle complex international transactions.

SVB COLLAPSE & AFRICAN STARTUPS

Co-founder and CTO Anthony Oduu, in a TechCrunch interview, said:

“Depositing money with U.S. banks is the most popular option for African startups but most of them rarely meet the conditions of doing so. Meanwhile, companies like us have simple banking solutions built and catered for startups based in Africa and other emerging markets.”

“While we had been building this product, we recently launched in beta in light of these events where we’ve got an influx of demand from some startups and VCs. Customers can access up to 25 safeguarded accounts (holding different currencies) on Verto.”

Although the direct impact of the SVB collapse on African startups could be minimal in terms of the number of companies banking with SVB, stakeholders said it may result in less funding for African startups this year.

Despite all these surfacing challenges, several startups have still decided to make the switch to Verto. Switching banks could prove to be a very tasking and difficult process, but regardless of that fact, many startups are willing to take the risk just so their businesses can be kept afloat. 

The future of the landscape for African startups is very uncertain. Although the emergence of Verto has and is serving great importance, there may yet be other alternative options on the horizon. Some experts have predicted the possibility of a rising wave of new  fintech startups who will decide to focus on service to African businesses which could in turn provide a lot more options for startups that are in need of support.

See More About SVB Collapse Here:

•https://www.investingport.com/is-there-a-possibility-of-elon-musk-buying-silicon-valley-bank/

•https://www.investingport.com/potential-buyers-eyeing-svb-bank-in-2023-who-will-acquire-it/

•https://www.investingport.com/amidst-the-bankruptcy-the-new-svb-ceo-urges-client-that-the-bank-is-open-for-buisness/