Okra, a prominent Nigerian fintech company, is in the process of developing a cost-effective cloud infrastructure tailored to the needs of businesses requiring data hosting and workload management. In response to the challenges posed by rising inflation and high interest rates, Nigerian startups are actively seeking to mitigate costs. Okra’s objective is to provide a more affordable and dependable alternative to foreign providers such as AWS and Azure by leveraging local expertise to address the demands of the market.
In March, a key employee confirmed the company’s foray into the cloud space, citing the necessity to explore additional revenue streams through market research. Notably, Fara Ashiru, CEO of Okra, did not provide comments when approached for input.
This latest undertaking positions Okra among a growing cohort of local cloud service providers striving to meet the requirements of startups, large enterprises, and government entities. Noteworthy participants in this sphere include Nobus Cloud Services, MainOne Cloud, Web4Africa, Galaxy Backbone, and Layer3 Cloud in Nigeria.
Although cloud computing in Africa is a fiercely contested arena, the market is relatively substantial, with potential customers demonstrating a willingness to invest in reliable services. Notably, Okra’s current focus area, open finance, represents a comparatively smaller opportunity.
Okra’s open banking APIs empower third-party financial service providers to access bank information in a responsible manner. The company’s expansion into cloud services comes following the closure of three open finance products—Balance, Income, and Transaction—which facilitated creditworthiness assessment for digital lenders and loan repayment facilitation.
Given that these open finance startups are private entities, there is limited visibility into their revenue. One unnamed African early-stage investor has expressed skepticism regarding the market opportunity of open finance, characterizing it as a small market dominated by three well-funded players. Okra has raised approximately $16.5 million, whereas major competitors such as Mono and Stitch have secured over $17.6 million and $52 million respectively.
Okra declined to comment on its expansion plans. Additionally, the market for companies offering open finance APIs has been constrained by the slow progress of open banking regulations by the central bank. Despite the adoption of open banking regulations in March 2024, the absence of common data-sharing standards persists.
Consequently, some open banking users are adapting their services to account for potential limitations of the technology. For instance, digital lenders are incorporating risk premiums into their lending practices, acknowledging the imperfections in credit assessment tools.
Notably, Okra has been collaborating with banks to standardize their APIs in anticipation of the enforcement of open banking regulations. This strategic endeavor aimed to enhance the reliability of Okra’s open banking services through improved relationships with the banks. As highlighted by a source familiar with the business, the operation of isolated systems within banks may incentivize unreliability, and without mechanisms to hold all partners accountable, scaling operations could be excessively risky and challenging.
