African fintechs that help companies access banking services in the U.S. and Canada are wooing founders affected by Mercury’s abrupt compliance changes last Monday.
Raenest, Leatherback, and Vesti are pitching to several founders seeking new banking partners to park millions of dollars in operating capital, several executives at those companies told TechCabal. Some founders have proactively contacted those fintechs.
“My LinkedIn has been blowing up since the announcement, even without any moves from my marketing team,” said Ibitade Ibrahim, CEO and founder of Leatherback, who said they are already engaging 50 startups looking to create U.S banking accounts.
Raenest and Graph have pushed marketing campaigns on social media and prominent tech publications.
“We also offer perks like same-day onboarding with two free USD cards and no charge on international transfers within the first two months,” Victor Alade, CEO of Raenest, told TechCabal on a call.
While some of these perks are compelling, some startups have switched to Brex, another US-based banking provider, over reliability concerns.
These African startups must deposit funding from investors and draw on those deposits to settle operational expenses. Other startups make frequent international payments and must stay connected to platforms like Stripe and PayPal.
“It is more of an access issue for us. I chose a bank that can keep the lights on,” said an e-commerce founder who switched to Brex when Mercury initially halted transactions on the company’s account ahead of the offboarding. “We cannot afford to abruptly lose access to our accounts.”
Fintechs like Leatherback and Vesti tell founders that, just like Mercury, they directly partner with U.S-based banks with whom they have cultivated deep relationships that leave no room for unpredictability.
Ibatide claims Leatherback is regulated in about seven countries and has 60 partnerships with local banks in America and India. “With Community Federal Savings Bank, one of our local partner banks in America, we spent two years demonstrating that we have the standard KYC and KYB processes and transaction monitoring process, giving them enough comfort.”
While some startups have begun to switch from Mercury, which gave them 30 days to close their accounts, some executives in Mercury alternatives who spoke to TechCabal say it may be too early to determine whether affected founders have favoured local options.
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