LemFi CEO shares origin story and classes at Pitch2Win

On the fifth version of Pitch2Win on July 30, a yearly occasion the place aspiring entrepreneurs showcase their concepts and be taught from trade consultants, Ridwan Olalere, CEO of remittance startup LemFi, shared the riveting origin story of his startup.

Serving over 30 nations, Lemfi permits Africans within the diaspora to ship cash dwelling. The worldwide remittance market, valued at about $800 billion yearly (with Africa accounting for roughly $100 billion), is rife with alternative and complexity. LemFi’s success lies in navigating each.

Olalere’s journey to founding Lemfi wasn’t a straight line. A decade in the past, he was a developer at Resorts.ng, a Nigerian reserving platform. He then based ForLoop, a builders’ neighborhood. He went on to work as a senior software program engineer at Flutterwave, and later moved to OPay, the place he was director of cost. Finally, Olalere grew to become Uber’s nation supervisor in Nigeria earlier than occurring to discovered his startup.

In a candid, partaking keynote, Ridwan walked the viewers by LemFi’s evolution from a pre-seed thought to a Collection Successful, revealing the scrappy journey of constructing a borderless banking platform for Africans within the diaspora.

Minutes later, Pitch2Win convener Oo Nwoye—who additionally wrote LemFi’s first pitch deck—joined him for a full of life Q&A.  If you happen to missed the occasion, right here’s a deep dive into Olalere’s story and the highest ten takeaways from his speech.

The pre-seed: Embrace assumptions and begin small

LemFi is at present a number one remittance app for the African diaspora.  However the thought wasn’t born absolutely fashioned. “We saved evolving the whole thought,” Olalere admitted, recounting how in 2020 the idea shifted from inventory buying and selling, impressed by Robinhood’s hype, to digital banking, and he lastly settled on constructing a remittance app for Africans within the diaspora.

The concept stemmed from his time at OPay, the place he labored as cost director and launched an unsuccessful remittance product. 

“We didn’t just like the P&L of Nigerian banking startups,” he defined. At OPay, charging 20 naira per transaction yielded a median income per consumer (ARPU) of simply $10–$15, whereas buying brokers price $20. “Your payback interval was going to be the second 12 months,” he stated. 

Remittances, with increased transaction values, promised higher economics. However the pre-seed part was chaotic. Ridwan and Nwoye, who wrote the primary pitch deck, began with a clean slate and quite a lot of guesswork.

“We have been attempting to lift a $3 million valuation, $500,000, with none product,” Nwoye recalled. 

Olalere pointed to the slide that claimed 170 million Africans have been within the diaspora. “It’s a lie,” he laughed. 

Additionally they listed giants like Western Union and TransferWise as rivals, prompting one investor to scoff: “You’re in Lagos. You’re telling me we must always provide you with $500,000 to beat these guys. Please don’t waste our time.”

Embrace imperfect circumstances

The app’s early design was equally tough. “If you happen to’re not embarrassed about your design pre-seed or whenever you’re beginning the corporate, then you definately’re not beginning early sufficient,” Ridwan quipped. The color palettes have been unsophisticated, bugs abounded, and the app did only one factor: transfer cash between Canada and Nigeria. 

Olalere additionally identified that the selection to concentrate on Canada was extra pragmatic than best. Solely 100,000 Nigerians lived there, in comparison with over one million within the UK or US, however a Canadian licence was the simplest to acquire. 

“Ought to we wait six months to get the UK license, which was a 50/50 likelihood, or begin in Canada, the place we had a license inside that month?” Ridwan requested.  Beginning a workforce in too many locations directly can set you up for failure. When you could be tempted to launch in a number of markets concurrently and spend loads on advertising, this typically results in excessive consumer churn. At this early stage, your service isn’t nice, and also you miss the chance to be taught and construct confidence by perfecting your product for a smaller, extra centered market.

They selected the Nigeria-Canada hall, a slender scope that allowed LemFi to “construct the muscle” for advertising, distribution, and debugging.

Within the early days, additionally they made mistaken assumptions about their burn price. The deck’s 12-month runway was optimistic. It lasted six months. A projected 2% transaction charge led to losses, and Flutterwave’s 4.5% processing prices ate into margins. 

The pre-seed deck, flaws and all, embodied Ridwan’s mantra: “A very powerful factor is simply to begin, regardless of how small. Then you may determine the remaining in a while.” Assumptions have been okay, even essential, so long as you saved shifting.

Have financial savings  

Years earlier, a mentor had given him an important piece of recommendation: have substantial financial savings earlier than launching a startup. On the time, Ridwan had brushed it off. “I didn’t suppose it made sense,” he admitted.

In hindsight, it was a lifeline. In a rustic like Nigeria, the place security nets like medical insurance are sometimes skinny, private financial savings offered the liberty to take a leap of religion. This was by no means extra evident than in 2020, when Ridwan made his largest private sacrifice, leaving his function at Uber only one month earlier than a big quantity of his restricted inventory models (RSUs) have been set to vest.

There was some huge cash at stake. However for Olalere, the choice was easy. “I simply felt too excited in regards to the challenge,” he stated. “That is it. This can work. We now have to go all in.” He resigned, unwilling to be “dishonest with Uber” by juggling his startup along with his company life. 

His financial savings, from his time at Uber and OPay, grew to become the startup’s preliminary lifeline. He recollects wiring £19,000 to consultants and engineers, utilizing a few of it for licenses, which confirmed buyers a stage of dedication essential for attracting their consideration.

“When you could have financial savings, you could have that to make use of to dwell your life whereas embarking on this very painful journey,” he mirrored. It was this private funding that signalled seriousness to buyers and allowed LemFi to get off the bottom.

The seed stage: Show traction by mastering storytelling 

The seed stage revealed progress and humility. The $300,000 annual income projected within the pre-seed deck proved elusive; Lemfi hit $23,000 month-to-month, a fraction of the aim. Nevertheless, going from zero to $23,000 was a win as a result of it demonstrated that Lemfi was not a pipe dream, however a enterprise with actual momentum.

By 2021, Lemonade Finance rebranded to LemFi and joined Y Combinator (YC), a turning level that sharpened its storytelling. The seed deck ditched the app’s clunky interface for data-driven storytelling. “That is storytelling,” Ridwan repeated. The seed deck ditched the app’s clunky interface for numbers: $23,000 in month-to-month income, licenses in Canada, the UK, and the US, and a 135% development price. The market knowledge estimates have been corrected to way more correct figures, too.

Olalere credited YC for instructing him to border metrics persuasively.  That is vital as a result of whenever you’re elevating your seed spherical, you need to present traction, and also you need to emphasise the numbers.

YC companion, Michael Seibel, posed a query: “If you happen to inform an investor you went from one buyer to 2, otherwise you grew 100% week-on-week, which one do you suppose the investor prefers?” The reply was apparent.  “It’s all about the way you current it.” 

The Collection A: Scaling with sophistication

By the Collection A spherical, Lemfi was unrecognisable. The deck was glossy, with a brand and a sophisticated design. The Collection A deck emphasised workforce sophistication. “Within the first deck, it was simply, ‘Do you could have the fitting founders?’ Third deck—workforce,” Ridwan defined. 

Buyers committing $8–$15 million wanted confidence within the workforce’s means to handle development. A standout rent was Rian Cochran, Ridwan’s former boss at OPay, who joined as a co-founder. 

“[Cochran] was my boss,” Ridwan admitted. When Nwoye steered a finance skilled, Ridwan known as Cochran. They’d not been shut as co-workers, so Cochran consulted his former CEO, Nuno Sitima, who vouched for Ridwan: “If there’s anyone in Africa…that was price doing [a startup] with, then the one title in his thoughts was Ridwan.”

Cochran signed on, forgoing a wage for a 12 months. “You’re at all times interviewing,” Ridwan mirrored. “Wherever you’re, you’re naturally interviewing in life.”

Past scaling the standard of the workforce, it additionally issues to Collection A buyers that the product has made vital traction for the reason that seed increase. “You don’t need to undergo pre-seed, seed, Collection A with no progress, no traction, and be upset that no investor is supplying you with cash or time. There must be large progress.”

Lemfi’s income had soared, possible crossing the $100,000–$200,000 month-to-month threshold typical for Collection A rounds. The deck included metrics like compound month-to-month development price (CMGR) and annual recurring income (ARR)—phrases Ridwan as soon as discovered baffling. “I by no means knew what that meant,” he laughed. Even rivals advanced, with Revolut added to the listing, regardless of its irrelevance. “That has no enterprise with us,” he quipped.

The app additionally seemed and felt higher, supporting remittances to tens of nations, from the Philippines to Brazil. “We had Ghana, Kenya, Uganda, Tanzania,” he famous, a far cry from the Canada-Nigeria area of interest.

Create a playbook, but in addition be fast to adapt

This growth was not unintentional. Olalere actively sought classes from Nigeria’s success, the place Lemfi mastered buyer acquisition prices (CAC) on Fb and recognized efficient channels. 

“Did Fb work higher than Instagram? Did Instagram work higher than YouTube? Did YouTube work higher than influencers?” he requested rhetorically. 

Nigeria’s playbook—favouring influencers—was tailored for Ghana, however Kenya required a special strategy: “Influencers don’t work in addition to simply free training there.”

These insights fashioned a scalable technique. “You’ll be able to write a small playbook and say you’re going to go after Ghana, but it surely doesn’t imply it’s going to work,” he stated. “However at the very least you could have someplace to begin from and readjust.”

Management info because the stakes rise

As Lemfi scaled, the stakes intensified. Olalere grew to become extra guarded, a shift Nwoye seen with a mixture of amusement and respect. 

“In the beginning, I used to be the one man at all times receiving funding updates,” Nwoye stated. “Then impulsively, it grew to become extra secretive. I realized of Collection A from TechCrunch.” 

Olallere’s response revealed the pressures of the remittance trade: The details about the quantity of remittance you obtain into a rustic may be very delicate, particularly in rising markets like Nigeria, Ghana, and Kenya, the place regulators scrutinise remittance inflows, looking for greenback inflows to bolster scarce reserves. 

A misreported determine might shutter a enterprise in a single day, Ridwan warned. Lemfi tightened info entry, holding knowledge to a “excessive normal of who would get entry.”

Competitors added one other layer of paranoia. In Africa’s tech scene, success breeds imitators. “If one particular person is aware of you’re doing effectively, three days from then, their associates begin the identical firm,” Olalere stated. 

These copycats dilute investor worth, as “the identical man that offers A cash will give B cash, will give C cash.” By limiting info, Lemfi aimed to “get a head begin, to scale quick, to construct enormous moats round your small business.”

Lemfi’s development is plain. “We’re larger than each one among them besides Sendwave,” Olalere stated proudly. 

He goes on so as to add that his imaginative and prescient extends past remittances. He’s “enthusiastic about constructing inclusive monetary ecosystems for the trendy African,” a aim evident in Lemfi’s growth into multicurrency accounts and new markets. 

One overarching lesson on his roadmap is: simply begin, and the remaining will observe.

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