The co-founder and CEO of Nigerian Fintech Flux said dropping out of studies paved the way for the creation of a new crypto payments company, which has since been supported by the acclaimed start-up accelerator Y-Combinator.
Ben Eluan started Flux in 2019 with Osezele Orukpe, Akintunde Israel and Ayomide Lasaki. They met as freshmen studying various engineering and computer science courses at Obafemi Awolowo University in Nigeria to express their mutual interest in software programming.
Many of the OAU’s alumni work for large technology companies in Africa or have even started their own startups, Eluan told CNBC in a phone call.
For him and his friends, however, school was more of a “distraction” from their passion for programming, which eventually led them to abandon the OAU.
“We’d program instead of going to class,” and work on software all night, Eluan said.
Flux is a cryptocurrency transfer app. It allows users to convert sovereign currencies into crypto and then send those funds overseas to make the international money transfer process faster and more efficient.
The original idea for Flux came when the four students were being paid to do a small programming project they’d been working on outside of college. However, the money was transferred from the UK in pounds sterling, which, according to Eluan, took almost a full week – “It was 2019, sending money shouldn’t be difficult.”
When looking at some of the cross-border payment platforms in the market at the time, they found that these methods tended to use traditional fiat currencies to process transactions. Fiat currencies are government-supported money such as the dollar, the pound or the euro.
The problem with this, Eluan explained, is that fiat currencies have to go through various channels such as banks and regulators before anyone can actually receive the money.
In addition, cross-border transfers to Africa are the most expensive in the world, according to a recently published paper by the US think tank Brookings Institute. Wire transfer service providers charge an average fee of almost 9%. In comparison, Flux charges a flat fee of $ 1.50 for transfers of any amount.
Due to its limitless nature, the founders landed on cryptocurrency as the solution to this problem. The process is faster and cheaper than other alternatives, Eluan said.
They used the allowance their parents sent them in college to build the company and kept working on other small freelance programming projects.
“A lot of hard work”
Eluan said that while her parents didn’t initially know they were using that college money for the business, they helped her learn that Flux was up and running.
Even when they eventually left school to work full-time at the company, Eluan said they were still not sure the business would work and receive financial aid. To make it happen, Eluan said they put “hundreds of hours into programming” for the company.
California-based venture capital fund Hustle Fund was the first to back Flux, and they were recently among the youngest founders in Africa to join top startup accelerator Y Combinator in its group of early-stage companies in the winter of 2021.
When asked what his advice would be to other aspiring young entrepreneurs, Eluan said that if they “believe in what they do … put a lot of work and focus on what they do, and it definitely will for them, too.” they work.”
Check out: Hard work and a lot of grit: Nigeria’s Pricepally CEO reflects on the lessons he learned as a founder