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YC-backed Duplo raises $1.3M pre-seed to build financial OS for B2B companies in Nigeria – TechCrunch


YC-backed Duplo raises $1.3M pre-seed to build financial OS for B2B companies in Nigeria – TechCrunch

Startups have sought to use technology to digitize processes in Africa’s B2B e-commerce and retail space over the past couple of years. While many focus on moving products and providing credit, issues around cash overdependency haven’t been tackled at scale. 

Here’s why this is a critical problem. When traditional distributors move goods from manufacturers and suppliers to retailers, they collect cash through a network of agents. These agents, from different parts, then proceed to make lump-sum payments into a central bank account.

For the most part, there is a lot of fraud behind the scenes because of inefficiencies in manual reconciliation processes on the distributors’ end. The logical thing to do would be to hire an accountant, but in the FMCG space, where margins are incredibly slim, that’s not on the cards for distributors.

So, in a nutshell, payments in the FMCG sector — primarily cash-based — is marred by inefficient processes which cost time, resources and customers. Duplo, a Lagos-based fintech, is attempting to tackle these inefficiencies by digitizing payment flows for B2B companies, starting with those in this industry.

Yele Oyekola, a former product lead at Carbon, started Duplo based on his experience as an economic policy officer for the UN in Africa, where touring different countries opened his eyes to how people and businesses were heavily reliant on cash.

“We are trying to make cash obsolete in Africa where lots of businesses in the distribution space heavily transact in cash for obvious reasons,” said the chief executive officer to TechCrunch in an interview.

“So, we’re focused on distributors, merchants and aggregators to stop the use of cash in this value chain because everyone knows how expensive cash is and how difficult it is to move with issues around theft and fraud.”

With Duplo, distributors can create unique virtual accounts for retailers and agents to make real-time payments or bank transfers, while the platform helps to reconcile their books automatically.

But in the FMCG industry, there’s isn’t a one-size-fits-all approach. Making bank…

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