Nigerian Investment Platform Chaka Bags $1.5 Million Investment After SEC License

Chaka, an investment platform that allows people to buy their favourite Nigerian and U.S stocks from their mobile devices, has raised $1.5 million in pre-seed investments.

The pre-seed round was led by Breyer Capital, while 4DX Ventures, Golden Palm Investments, Future Africa, Seedstars, and Musha Ventures participated. It’s the second joint deal for 4DX Ventures and Breyer Capital in the space of two weeks, the first in Egyptian social e-commerce platform Taager.

In April this year, digital investment platforms were caught in crosshairs with Nigeria’s SEC. The regulator declared their activities illegal and warned capital market operators working with them to renege on providing brokerage services for foreign securities. Unlike the United States' Robinhood which offers online brokerages, Nigerian investment platforms do not. Chaka, for instance, partners with Citi Investment Capital in Nigeria and DriveWealth LLC in the U.S. to issue stocks and securities.

According to Nigeria’s SEC, the bottom line was to bring the activities of these platforms under its purview as part of its efforts to safeguard the investing public.

The event set the precedence for the regulator’s all-out attack on other digital investment platforms, giving Chaka enough time to engage and conclude talks in about half a year. And last month, Chaka acquired the first fintech license issued by the SEC, making it the only investment platform operating as a digital sub-broker.

Chaka was officially launched in 2019 by Tosin Osibodu in order to create opportunities for Nigerians to invest in foreign assets and at the same time allow foreigners to invest in Nigerian assets.

The platform gives Nigerians access to more than 10,000 stocks and ETFs trading on local and foreign capital markets. Osibodu maintains that the platform has levelled entry barriers for borderless investments in Nigeria by providing customers with compliant access to the capital market.

“The thing about markets is that they have demand and supply with barriers to entry. We’re committed to lowering those barriers in local markets and by lowering barriers to investing for retail, more people will come to the market. In fact, more people came into the Nigerian stock market through us last year than any other broker. It’s like a demand-supply flywheel,” the CEO said in an interview with TechCrunch.

Chaka’s local assets are registered with the Nigerian Stock Exchange (NSE) Central Securities Clearing System (CSCS) and regulated by the Securities Exchange Commission of Nigeria (SEC). Dollar assets, on the other hand, are regulated by the US FINRA and the US SEC.

Osibodu says the company will use its pre-seed investment to expand footprints to Ghana and other West African markets. Improving its technology and services and securing partnerships with major financial institutions, including apex ones, is also a priority.