In early 2022, fintech startup Bloom – not to be confused with the Gen Z-focused investment app or large-cap revenue financing platform – was accepted into Y Combinator as the first-ever startup from Sudan to participate in the famous accelerator. In addition to the 4 founders’ achievements at Amazon, Meta, IBM and Goldman Sachs, the startup’s founding was also noteworthy and vital: helping Sudanese people protect their assets.

Now, after an initial limited release, a significant political upheaval in its home country, a breakthrough, small fundraising, and a rebranding to Increasestartup is now generally available, at the very least in some emerging markets.

Primarily geared toward people in East and North Africa, particularly Sudan, Elevate first created a product to hedge against the growing devaluation of those users’ national currencies with “high-yield” savings accounts, free foreign exchange transactions and related digital banking services – all based on the US dollar.

The problem Elevate focused on is a typical one. Inflation and currency devaluation have long been a priority for Africans who use bank accounts (one reason why the variety of unbanked people here is higher than in additional developed countries). In 2022-2023, the sub-Saharan region experienced a typical devaluation of 8% (in some countries the depreciation exceeded 40%). according to the IMFAND rankings that analysts expect the picture can be the same this yr.

Initially, Elevate aimed to construct a pan-African neobank that will integrate with local banks and wallets across the region, in addition to a USD banking add-on that might support receiving and saving USD remittances from friends, family and employers. In addition to Sudan, Ethiopia, Uganda and Tanzania were also targeted for early implementation.

“We come from the region, understand the nuances in our markets and can navigate what can seem like an ambiguous landscape. I would also add that we are comfortable – and perhaps even thrive – working in volatile markets. We are insuring the next decade of growth in Africa,” said Abdigani Diriye, considered one of the founders of Elevate.

Building in a volatile market

Between late 2021 and mid-2022, Elevate (then called Bloom) launched its first set of products to 100,000 people and secured $6.5 million in seed funding from YC, Visa, Global Founders Capital and distinguished angels similar to like Dropbox co-founder Arash Ferdowsi and N26 former CEO Nicolas Kopp.

But this early stage unfolded amid an environment of much greater drama: Sudan itself was undergoing a significant coup while civil war lurked behind the scenes. Under the strong arm of the military junta, Prime Minister Abdalla Hamdok was overthrown, kidnapped, after which reinstated before resigning himself – all in lower than three months.

In the wake of this chaos, Diriye and CEO Ahmed Ismail left for private reasons. Elevate remained committed to the region and developed a turnaround plan.

Youcef Oudjidaneone other co-founder who now runs the company with a fourth co-founder Khalid Keenansaid in a recent interview with TechCrunch that in the founders’ stay in Sudan and Ethiopia, they found a selected user demographic for his or her USD vision: the booming freelance and distant work sector.

In Africa and other emerging markets, there’s a growing variety of younger employees with the technical and language skills to work on freelance platforms Upwork and Fiverr. For them, the problem wasn’t opening local USD accounts; facilitates payments from international employers and online platforms in a cheap way.

“Using local products meant that many remote workers had a large portion of their earnings go to excessive fees. The solution was obvious. “Dollar products cannot be local,” said Oudjidane, who can also be a founding partner of emerging markets fintech fund Byld Ventures. “The product would need to start offering U.S. USD accounts,” accounts that, crucially, would facilitate ACH payments to enable pay-to-order and are available with the protections that U.S. banking provides, similar to an FDIC guarantee.

Market axis

Continued political instability in Ethiopia and the eventual outbreak of conflict in Sudan in 2023 accelerated Elevate’s turnaround. By then, the fintech had reassessed which markets it could serve; they needed a big population of freelancers and distant employees in emerging markets who were likely to work for clients further afield, and were battling the payment issues the team had seen in East Africa. Based on these aspects, Elevate chosen Egypt, Pakistan, the Philippines and Bangladesh.

“Remote workers who need to save in dollars have several options: Choose an FDIC-insured account or wallet, the latter of which poses a risk if the provider goes bankrupt, resulting in the loss of deposits. The essence of our business model is based on providing this protection. There is also a need for the money transfer service to go beyond traditional US dollar accounts with expensive SWIFT transfers and offer very cheap currency transfers,” Keenan said.

“Incumbent companies like Payoneer do not provide FDIC insurance and often charge high foreign exchange rates, as high as 3% in some markets. That’s why much of our model focuses on lowering currency exchange rates, as Wise did, and continuing to push for more favorable terms for remote workers.”

Since launching earlier this yr, Elevate, which makes it easier for non-US residents to receive payments from US employers and platforms like Upwork, Toptal, Fiverr and Deel (considered one of its customer acquisition partners), has signed up over 150,000 people on its latest markets . The San Francisco-based fintech provides these financial services in partnership with sponsoring bank Bangor Savings Bank. Its products are similar to those of other African fintechs, including Gray and Cleva.

What’s next for Elevate?

The change in Elevate’s strategy and the change of the partner bank from an Egyptian entity coincided with the transition from Visa to Mastercard. As a result, the fintech didn’t fully capitalize on Visa’s milestone-based investment. However, the founders don’t rule out that the Visa network will support a few of the future fintech products, e.g. prepaid and native cards.

The YC-backed company currently generates revenue from net interest income, foreign exchange and cards. It also plans to introduce savings and investment products in the coming months. According to Oudjidane, the company is close to profitability with sufficient funds in the bank, after a lean operation, and has spent about $2 million since its inception.

But that is not stopping the fintech from raising a fresh $5 million pre-Series A round, with 80% debt, from Dubai-based investment fund Negma Group to fuel its expansion into markets like Indonesia, South Africa and Turkey.

Before the outbreak of the war in Sudan, even when its single-digit million-dollar backing seemed extremely modest compared to a few of its peers in developed countries, Elevate was considered one of the best-funded startups. Local tech watchers later expected its success to be similar Alsoug supported by Fawryto draw more attention to Sudan’s fledgling tech startup ecosystem, which has only just begun to attract global investors after 30 years of international sanctions.

But things didn’t prove that way. While other start-ups with little probability have survived despite the conflict, Elevate, which has the luxury of serving consumers in various markets, will only re-establish a physical headquarters in the country once political stability returns.

“Freelancers and remote workers in these markets will undoubtedly be a key source of foreign income to help the recovery,” Oudjidane said.