Building in a volatile market

Between late 2021 and mid-2022, Elevate (then called Bloom) launched its first set of products to 100,000 people and secured $6.5 million in seed funding from YC, Visa, Global Founders Capital and prominent angels like Dropbox co-founder Arash Ferdowsi and N26 ex-CEO Nicolas Kopp.

But that early stage was played out amid a much bigger drama: Sudan itself was undergoing a major coup as a civil war lurked in the wings. Under the strong arm of a military junta, prime minister Abdalla Hamdok was deposed and kidnapped and then reinstated, before himself resigning — all within the space of less than three months.

In the wake of that chaos, Diriye and CEO Ahmed Ismail left for personal reasons. Elevate remained committed to the region and worked out a pivot.

Youcef Oudjidane, another co-founder who now runs the company with a fourth co-founder Khalid Keenan, said in a recent interview with TechCrunch that during the founders’ time on the ground in Sudan and Ethiopia, they discovered a particular user demographic for their USD vision: the booming freelancer and remote work sector.

Across Africa and other emerging markets, there has been a rise of younger workers with the technical and language skills to pick up jobs via freelancer platforms Upwork and Fiverr. For them, the difficulty hasn’t been opening local USD accounts; it’s been cost-effectively facilitating payments from international employers and online platforms.

“Using local products meant many remote workers had large chunks of their earnings eaten away with excessive fees. The solution was obvious. The USD products couldn’t be local,” said Oudjidane, who is also the founding partner of emerging markets fintech fund Byld Ventures. “The product would need to move to offering U.S.-based USD accounts,” accounts that, critically, would facilitate ACH payments to enable those freelance payments and came with the security that you get with U.S. banking, such as FDIC assurance.

Market pivot

Further political instability in Ethiopia, and the eventual outbreak of the conflict in Sudan in 2023, accelerated Elevate’s pivot. By then, the fintech had reevaluated which markets it would serve; they needed a large population of freelancers and remote workers in emerging markets who are likely to work for clients further afield and struggled with the payment pain points the team had seen in East Africa. Based on those factors, Elevate chose Egypt, Pakistan, the Philippines, and Bangladesh.

“Remote workers who need to save in dollars have a few options: Choose an FDIC-insured account or a wallet, with the latter posing a risk if the provider collapses, resulting in lost deposits. The core of our business model revolves around providing this protection. There’s also a need for a remittance service to move beyond traditional US dollar accounts with expensive SWIFT transfers to offering very low-cost FX transfers,” Keenan said.

“Incumbents like Payoneer don’t provide FDIC insurance and often charge high FX rates, up to 3% in some markets. So, a significant part of our model focuses on driving down these FX rates, similar to what Wise has done, and continuing to push for more favorable terms for remote workers.”

Since launching earlier this year, Elevate, which simplifies receiving payments for non-U.S. residents from U.S. employers and platforms like Upwork, Toptal, Fiverr and Deel (one of its partners for customer acquisition), has signed up over 150,000 people across its new markets. The San Francisco-based fintech provides these financial services by partnering with sponsor bank Bangor Savings Bank. Its products are similar to those of other African fintechs, including Grey and Cleva.