Okra, a Nigerian fintech whose APIs let banks and other financial service providers access customer data, is building a cloud infrastructure for businesses to host their data and run workloads. With interest rates through the roof and inflation at a five-year high, Nigerian startups are looking to cut costs—all of which Okra hopes to tap with a cheaper alternative to foreign AWSes and Azures.
“Like every other business, we were doing market research to find more revenue streams,” one highly placed employee said in March, confirming its new cloud adventure.
Fara Ashiru, Okra’s CEO did not respond to a request for comments.
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With this expansion, Okra joins a new brigade of local cloud service providers emerging to take up tasks for startups, big businesses, and government agencies. Some of these include Nobus Cloud Services, MainOne Cloud, Web4Africa, Galaxy Backbone, and Layer3 Cloud.
While the cloud computing space for Africa is extremely competitive, it is of a large relative size, with potential customers who will willingly pay for a reliable service. Open finance—the space that Okra currently operates in—is currently a much smaller opportunity.
These open banking APIs, therefore, help third-party financial service providers gain responsible access to the bank information of their customers. Expansion for the fintech comes three months after it shut down three of its products in open finance: Balance, Income, and Transaction. These products, the company said, would help digital lenders determine the creditworthiness of borrowers and facilitate the repayment of loans.
“These products did not make any business sense to hold on to,” an Okra employee.
Much of open finance startups’ revenue remains out of view as they are private companies, but one African early-stage investor has questioned the market opportunity of open finance.
“It is a small market and it has three big players who have raised so much money, so eventually, there’s going to be one market leader,” said an investor who asked to remain anonymous to speak freely on record. Okra has raised some $16.5 million while its major competitors, Mono and Stitch, have cumulatively raised more than $17.6 million and over $52 million respectively.
Okra did respond to requests seeking comments on its expansion.
A growth potential of the companies developing open finance APIs has also been limited by the slow progress of the central bank in developing open banking regulations. Despite the country’s adoption of open banking regulations in March 2024, common data-sharing standards remain non-existent.
For example, some open banking users are designing their services to account for possible lapses in judgment by the technology. For instance, digital lenders—who know these tools are not perfect at gauging creditworthiness—may still apply a risk premium to those loans.
Okra had been working towards partnering with banks to standardise the banks’ APIs ahead of the enforcement of the open banking regulation, according to a person familiar with the business. In return, Okra was looking to lock down the reliability of its open banking services via the relationship. “Operating in silos with banks incentivises unreliability, and if there are no means to hold all partners accountable, scaling will be too risky and hard,” the person said.