Founded in war-torn Sudan, Elevate, backed by YC, now provides fintech to freelancers around the world

In early 2022, fintech startup Bloom, not to be confused with the Investment app focused on Generation Zor the Heavily capitalized revenue financing platform – era accepted into Y Combinator as the first Sudanese startup to participate in the famous accelerator. Beyond its four founders’ backgrounds at Amazon, Meta, IBM and Goldman Sachs, the startup’s premise was also notable and vital: helping Sudanese people protect their wealth.

Now, after a limited initial launch, a major political upheaval in its home country, a turnaround, a little fundraising and a rebranding for Elevatethe startup is now open to general availability, at least in some emerging markets.

Primarily targeting people in East and Northern Africa, particularly Sudan, Elevate had initially created a product to protect against the growing devaluation of those users’ national currencies via “high-yield” savings accounts, free FX, and adjacent digital banking services – all based on the US dollar.

The problem Elevate was targeting is widespread. Inflation and currency devaluation have long been concerns for Africans who use bank accounts (one reason why the number of unbanked citizens here is higher than in more developed countries). In 2022-2023, the sub-Saharan region experienced typical devaluations of 8% (with depreciations exceeding 40% in some countries) according to the IMFAND ratings that analysts expect the picture will be the same this year.

Elevate initially it aimed to build a pan-African neobank which would integrate into local banks and wallets across the region, a USD banking add-on that could support receiving and saving USD remittances from friends, family and employers. In addition to Sudan, it has also targeted Ethiopia, Uganda and Tanzania for initial deployments.

“We are from the region, we understand the nuances of our markets and can navigate what can seem like an ambiguous landscape. I would also like to add that we are comfortable, perhaps even thriving, working in volatile markets. We are supporting the next decade of growth in Africa,” Abdigani Diriye, one of Elevate’s founders, said at the time.

Building in a volatile market

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

But that initial phase took place in the midst of a much larger drama: Sudan itself was undergoing a major coup while a civil war lurked in the wings. Under the strong arm of a military junta, Prime Minister Abdalla Hamdok was deposed, kidnapped and then reinstated before resigning, all in the space of less than three months.

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

Youcef Oudjidaneanother cofounder who now runs the company with a fourth cofounder Khalid Keenansaid in a recent interview with TechCrunch that while on the ground in Sudan and Ethiopia, the founders discovered a particular demographic of users for their USD vision: the booming freelance and remote work sector .

Across Africa and other emerging markets, there has been an increase in younger workers with technical and language skills finding work via freelance platforms Upwork and Fiverr. For them, the difficulty wasn’t opening local USD accounts; has cost-effectively facilitated payments from international employers and online platforms.

“Using local products has meant that many remote workers have seen much of their earnings eaten away by excessive fees. The solution was obvious. USD products could not be local,” said Oudjidane, who is also the founding partner of emerging markets fintech fund Byld Ventures. “The product should move to offering US-based USD accounts,” accounts that would, crucially, facilitate ACH payments to enable those freelance payments and come with the security you get with the US banking system, such as FDIC insurance.

Market pivot

Further political instability in Ethiopia and the eventual outbreak of conflict in Sudan in 2023 accelerated Elevate’s pivot. By then, fintech had re-evaluated which markets it would serve; they needed a large population of freelancers and remote workers in emerging markets who were likely working for clients further afield and struggled with the payment issues the team had encountered in East Africa. Based on these factors, Elevate chose Egypt, Pakistan, the Philippines and Bangladesh.

“Remote workers who need to save dollars have a few options: Choose an FDIC-insured account or a wallet, the latter of which poses a risk if the provider collapses, resulting in a loss of deposits. The core of our business model revolves around providing this protection. There is also a need for a remittance service that goes beyond traditional US dollar accounts with expensive SWIFT transfers to offer FX transfers at very low costs,” Keenan said.

“Incumbents like Payoneer do not provide FDIC insurance and often charge high exchange rates, up to 3% in some markets. Therefore, a significant part of our model focuses on reducing exchange rates, similar to what Wise has done, and continuing to push for more favorable conditions for remote workers.”

Since its launch earlier this year, Elevate, which makes it easier for non-US residents to receive payments from US employers and platforms such as Upwork, Toptal, Fiverr and Deel (one of its acquisition partners of customers), has enrolled over 150,000 people in 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 Gray and Cleva.

What is the future of Elevate?

Elevate’s strategy shift and partner bank change from an Egyptian entity overlapped with the move from Visa to Mastercard. As a result, the fintech did not fully leverage Visa’s milestone-based investment. However, the founders do not rule out the possibility that the Visa network could support some of the fintech’s future products, such as prepaid and local cards.

The YC-backed company currently generates revenue from net interest, FX and card trading. It also plans to launch savings and investment products in the coming months. According to Oudjidane, the company is close to profitability with sufficient funds in the bank, having run a lean operation and spent approximately $2 million since its inception.

However, that hasn’t stopped the fintech from raising a new pre-Series A round of $5 million, with 80% debt, from Dubai-based investment fund Negma Group, to fuel its expansion into markets like Indonesia, South Africa and Turkey.

Before war broke out in Sudan, even though its backing of single-digit millions appears incredibly modest compared to some of its developed world counterparts, Elevate was one of the most highly funded startups. Local technology observers subsequently expected its success, along with that of Alsoug supported by Fawryto draw more attention to Sudan’s nascent tech startup ecosystem, which had just begun to attract global investors after 30 years of international sanctions.

But things didn’t go that way. While other startups, with few resources, have remained despite the conflict, Elevate, which has the luxury of serving consumers in multiple markets, will only re-establish a physical headquarters in the country when political stability returns.

“Freelancers and remote workers in these markets will undoubtedly be a key source of foreign income to help rebuild,” Oudjidane said.

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