Grace Ashiru
African fintech companies that assist businesses in accessing banking services in the U.S. and Canada have become appealing options for founders impacted by Mercury’s sudden compliance modifications last Monday. Companies like Raenest, Leatherback, and Vesti are now the focus of several founders seeking new banking partners to manage millions in operational funds, according to various executives who spoke with TechCabal. Some of these founders have taken the initiative to reach out to these fintechs directly.
“The number of messages on my LinkedIn has skyrocketed since the announcement, and that’s without any effort from our marketing department,” stated Ibitade Ibrahim, CEO and founder of Leatherback, noting that they are currently in talks with 50 startups about setting up U.S. banking accounts.
Meanwhile, Raenest and Graph have intensified their marketing efforts, deploying campaigns across social media and major tech publications.
“Same-day onboarding, two free USD cards, and no fees on international transfers for the first two months are some of the perks we offer,” Victor Alade, CEO of Raenest, shared with TechCabal during a call.
Despite these attractive offerings, some startups have transitioned to Brex, a US-based banking provider, due to concerns about reliability.
These African startups need to deposit investment funds and utilize those deposits for operational costs. Additionally, many need to make regular international payments and maintain connections with platforms like Stripe and PayPal.
“For us, it’s really about access,” explained an e-commerce founder who moved to Brex after Mercury unexpectedly froze transactions on their account before initiating offboarding. “Losing access to our accounts suddenly is something we can’t afford.”
Fintechs such as Leatherback and Vesti, similar to Mercury, emphasize their direct partnerships with U.S-based banks, fostering deep, reliable relationships that minimize unpredictability.
According to Ibatide, Leatherback operates under regulations in approximately seven countries and maintains 60 banking partnerships across the U.S. and India. “With Community Federal Savings Bank, one of our American partner banks, we invested two years to prove our adherence to standard KYC and KYB processes, along with our transaction monitoring capabilities, which provided them with sufficient assurance,” Ibatide explained.
While some startups have started transitioning away from Mercury following a 30-day notice to close their accounts, executives from alternative platforms to Mercury, interviewed by TechCabal, suggest it might be premature to determine if affected founders are opting for local alternatives.
