Stax receives $2.2 million for its software, which allows Africans to conduct transactions using automated USSD codes.

Through USSD codes, a business called Stax has acquired a seed round of $2.2 million to help Africans buy airtime, send money, or move money between banks electronically. Anthemis Group, 500 Startups, Garuda Ventures and GAN Ventures also participated in the round, which was co-led by U.S.-based VC firms World Within Ventures and Noemis Ventures. USSD technology, which is primarily offline and primarily utilized by feature phones, has 850 million connections in a market where internet-enabled app-based banking can reach 300 million subscribers on the continent. Sub-Saharan Africa is the region where more than 90% of digital transactions are carried out using this technology, according to recent reports.

Code-based transactions are facilitated by telecommunications providers and banks, which are the dominant players in this industry. Callers dial a specific service’s *737# access number and then follow a prompt asking if they want to send money, pay bills, check their account balance or any other feature. The bank or telecommunications company then fulfills the user’s request for that service, which may include any of these options. However, USSD has its own set of issues. If you’re a banking client in Nigeria, you’re likely to have three to five bank accounts, and while some people utilize bank apps or fintech platforms to conduct online transactions, others use the USSD codes. While learning one or two codes is easy for the former, memorizing five is a whole other ballgame.

This is where Stax comes in. As a result, the app users can access offline is able to execute transactions without dialing any USSD code thanks to the startup formed by Ben Lyon, Jess Shorland and David Kutalek. Stax’s goal here is to enhance the user experience.

You can access all of your bank accounts, mobile wallets, and crypto all in one app that doesn’t require mobile data. As CEO Lyon told TechCrunch, “we’re attempting to respond to the realization that you have around 300 million smartphone owners in Africa, who have a strong desire to transact via USSD instead of apps. They want to be offline, despite owning smartphones, and thus we’re developing for them. The sweet spot for Stax is right there. Stax claims to be a global team, with employees based in the United States, the United Kingdom, Nigeria, and Kenya working remotely. There are more than 100 banks and mobile money accounts accessible in Kenya, Uganda, Tanzania, Nigeria and Ghana for users to utilize in the six countries where it is fully supported.

It was released from beta testing in May of this year. When it launched, it had just 3,000 monthly active users. Since then, it has more than 170,000 customers, but only 40,000 are active monthly users. For all its simplicity and offline capabilities, experts have warned that USSD is vulnerable to attacks from hackers with a penchant to disclose sensitive information.. A lack of consistent data regulation is partly to blame for these problems, according to Lyon, who cites this as an example. “Compliance with all of the local requirements will be extremely tough for any company that wants to become pan-African. The only way to win that game, according to my opinion, is to play a different game,” he stated.

Stax only asks for permissions to send and view messages, access contacts, and make and manage phone calls when users download the program. In Lyon’s view, these phone calls are a form of permissionsage. Lyon claims that these permits don’t reveal any personal information about clients. Because of this, hackers cannot hurt users, do anything with stolen data, or shift money in the event of a hack.

It is our goal to learn as little as possible about each of our users; we don’t want to know any of their personally identifying information.” As a utility app for your money, “we’re never going to sell or cross-sell your data, we’re never going to try and target advertising specifically to you,” stressed the CEO of Stax.


With data-backed insights, Stax could’ve gotten advertising dollars from cross-selling. To compensate for its lack of revenue, the company plans on charging commissions from partner brands that provide additional services that its consumers can access through its app in the future. Before starting Stax, Lyon, Shorland, and Kutalek met in Kenya while working for several finance startups. They became friends and eventually founded Stax together. Kenyans utilize mobile money more than any other country in the world. While brainstorming for a new project, they realized that USSD rails may be optimized for future use cases by focusing on the technology underlying it.

“We discovered that nearly all of the continent’s digital banking services rely on USSD as their principal method of communication. To begin with, we asked ourselves, “How can we make USSD programmable and open it up so that one could effectively kind of screen scrape USSD services to construct new experiences?” Lyon explained.

Hover was the company’s first iteration. Developers may use it to create USSD rails apps because to its API platform. Stax, a universal money app on USSD rails for African customers, was created two years later as the platform failed to generate enough revenue from developers. As of this writing, Hover is still the parent firm. Stax intends to incorporate a self-custody crypto wallet starting with USDC so that customers can buy airtime when they dial non-financial codes in the course of their travel. After closing its Series A investment, Stax will be able to improve these features and expand its service area from 10 African countries to 50. Stax is also considering a move into emerging areas like South and Southeast Asia, where the use of USSD is common, Lyon said. But that’s a long way off.

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