YC-backed Duplo raises $1.3M pre-seed to build financial OS for B2B companies in Nigeria

Startups have sought to use technology to digitize processes in Africa’s B2B e-commerce and retail space over the past couple of years. While many focus on moving products and providing credit, issues around cash overdependency haven’t been tackled at scale. 

Here’s why this is a critical problem. When traditional distributors move goods from manufacturers and suppliers to retailers, they collect cash through a network of agents. These agents, from different parts, then proceed to make lump-sum payments into a central bank account.

For the most part, there is a lot of fraud behind the scenes because of inefficiencies in manual reconciliation processes on the distributors’ end. The logical thing to do would be to hire an accountant, but in the FMCG space, where margins are incredibly slim, that’s not on the cards for distributors.

So, in a nutshell, payments in the FMCG sector — primarily cash-based — is marred by inefficient processes which cost time, resources and customers. Duplo, a Lagos-based fintech, is attempting to tackle these inefficiencies by digitizing payment flows for B2B companies, starting with those in this industry.

Yele Oyekola, a former product lead at Carbon, started Duplo based on his experience as an economic policy officer for the UN in Africa, where touring different countries opened his eyes to how people and businesses were heavily reliant on cash.

“We are trying to make cash obsolete in Africa where lots of businesses in the distribution space heavily transact in cash for obvious reasons,” said the chief executive officer to TechCrunch in an interview.

“So, we’re focused on distributors, merchants and aggregators to stop the use of cash in this value chain because everyone knows how expensive cash is and how difficult it is to move with issues around theft and fraud.”

With Duplo, distributors can create unique virtual accounts for retailers and agents to make real-time payments or bank transfers, while the platform helps to reconcile their books automatically.

But in the FMCG industry, there’s isn’t a one-size-fits-all approach. Making bank transfers can be expensive for some retailers and agents; instead, they visit mobile money agents to perform transactions.

Duplo doesn’t have any issues with that, as retailers can still make transactions to these same virtual accounts via the mobile money agents; reconciliation is carried out after that. 

Duplo charges a 1% fee for every transaction performed on its platform. And depending on their size, businesses also pay between ₦100 (~$0.20) to ₦1,000 (~$2.00) to create virtual accounts.

Besides providing tools that enable B2B companies to digitize their payment flows, there’s a no-code tool for them to optimize trade with their business customers, vendors and suppliers. The platform also helps these companies to generate or pay invoices, offer credit to their business customers and a dashboard to attribute payment flows to a particular customer, retailer or location.

“The way we see our value prop is we help businesses automate, embed and launch payment products. So basically, inflows or outflows, automatic reconciliations for businesses and embedding payments into marketplaces. And then we also have businesses that want to provide BNPL services to smaller businesses,” said Oyekola, who co-founded Duplo with Tunde Akinnuwa in September 2021.