Nigerian fintech startup Vella Finance is pivoting from crypto to SME banking, ceasing all cryptocurrency services on October 30th. The move comes just over a year after Vella launched to enable crypto spending and payments for African businesses.
Co-founder Tolu Adedayo said the pivot is driven by two key factors: the need to operate within regulatory confines as a bank and the desire to better serve informal SMEs, which drive much of Nigeria’s GDP but lack access to financial services.
“Banking requires playing in regulatory confines,” Adedayo told TechCabal. “We already serve businesses from the onset with data. It makes sense to offer a full banking system to serve them better.”
Vella’s flagship product, Launch by Vella, helps Nigerian SMEs formally register their businesses for a fee of around $14. Vella also helps informal businesses formalise and get instant business bank accounts and payment infrastructure to enable online collections. It also provides free invoicing and payment links.
According to Adedayo, Vella will roll out more features catered to SME banking needs in the coming weeks as it fully focuses on this sector.
Vella’s pivot to SME banking aligns with its goal of driving financial inclusion and growth for small businesses in Nigeria. By pivoting to formal banking tailored for the sector, Vella hopes to fill a critical gap for the country’s informal and underserved enterprises.
Vella’s shift to SME banking comes amid growing interest in this sector from investors and fintech startups. The SME banking market in Africa is estimated to be worth $3 trillion, but only a small fraction of SMEs have access to formal banking services. Vella’s focus on informal SMEs is particularly relevant in Nigeria, where over 80% of businesses are informal. The company’s well-positioned to capitalize on the growing demand for SME banking services in Africa. Its focus on technology, data, and regulation make it a strong contender to become a leading player in this space.
