Two Nigerian Founders Turned a ₦5 Million Bet Into a Fintech Platform Processing Over ₦100 Billion
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Two Nigerian Founders Turned a ₦5 Million Bet Into a Fintech Platform Processing Over ₦100 Billion Source: Etukukponoblog |
When Nigeria restricted international spending on naira-denominated bank cards, cutting consumers off from products and services priced in dollars, two entrepreneurs saw the disruption as a business opportunity, defied the odds and invested ₦5 million to build what is now Cardtonic.
Cardtonic was founded after Nigeria restricted international spending on naira cards, creating a demand for alternative payment solutions like gift cards.
The founders bootstrapped Cardtonic with ₦5 million, growing it to process over ₦100 billion in transactions before attracting institutional investment.
Fraud, cash limitations, and building consumer trust were key challenges, prompting the founders to prioritize verification, reliability, and delayed gratification.
Their experience also led to the creation of Breet, a cryptocurrency-to-cash platform, and inspired a message to African entrepreneurs: start small, solve real problems, and let results drive confidence and growth.
In a recent interview with Business Insider Africa, Kayode Faturoti and Usman Balogun reflected on how disruption in Nigeria’s payments market exposed a wider gap in Africa’s digital economy.
The opportunity prompted them to invest ₦5 million in Cardtonic, despite having no guarantee that the business would succeed.
Over time, they bootstrapped the company into a platform that, according to the founders, processed more than ₦100 billion in transactions before raising institutional capital.
Their experience also led them to launch Breet, a cryptocurrency-to-cash platform designed to remove the delays, complexity and risks associated with peer-to-peer transactions.
A Business Born From Nigeria’s Dollar Shortage
Cardtonic emerged when the Central Bank of Nigeria reduced international spending limits on naira cards to about $100 a month.
Consequently, customers struggled to pay for products and subscriptions priced in foreign currencies.
A Nigerian who wanted to buy a $200 product from an international retailer such as Sephora, for example, could no longer complete the purchase using a local bank card.
Gift cards became an alternative payment method, prompting Faturoti and Balogun to source them in bulk and offer them to customers at discounted prices.
However, they soon discovered another side of the market: people with unused gift cards who lacked a reliable channel through which to sell them.
Cardtonic gradually became the bridge between people seeking gift cards and those who wanted to convert them into cash.
“The problem was access to dollars. When we started, the Central Bank of Nigeria had reduced international spending limits on naira cards to almost $100 per month, and everyday Nigerians lost the ability to pay for many things priced in dollars,” the founders said.
“We initially sourced gift cards from different channels in bulk and offered them at a discount. We later realised that other users had gift cards lying around that they needed to sell, so we became the bridge between buyers and sellers.”
At the beginning, the process was largely manual and lacked the infrastructure required to support rising demand.
Nevertheless, the founders believed the problem was significant enough to justify their investment.
“We were not certain that the model would work, but our confidence came from the demand that already existed. We knew that even if our first approach failed, another approach would work because the dollar-access problem would remain until someone solved it.”
Their confidence, therefore, rested not on the original business model but on their belief that the underlying problem would persist.
Fraud, Limited Cash and the Cost of Trust
Although customers began paying for Cardtonic’s services early, the company still faced the operational challenges common in Africa’s digital finance industry.
Fraud became one of Cardtonic’s biggest threats because gift card transactions often involve strangers across different countries, leaving the platform exposed to financial losses and reputational damage.
“In a market built on trust between strangers, one bad actor can cost a company money and, more importantly, damage its reputation,” Faturoti and Balogun said.
“We invested enormous energy in verification and reliability so users would not have to hope that a transaction would succeed. We wanted them to know that the system would work.”
Meanwhile, limited cash forced the founders to make difficult personal choices, as every expense had to come from revenue generated by the business.
“For years, almost everything went back into the business instead of our pockets. What kept us going was that we cared about the problem and could see the numbers improving every month. Progress that can be measured is more motivating than any motivational speech.”
The founders described delayed gratification as one of their greatest sacrifices, as they repeatedly reinvested earnings in technology, staffing and operations rather than paying themselves substantial returns.
Over time, the experience taught them that trust was not merely part of Cardtonic’s branding but the product customers were buying.
Choosing Profitability Over “Growth Theatre”
Cardtonic’s early growth without substantial venture funding also imposed financial discipline. The company could not pursue expansion simply to attract attention or improve its valuation.
Instead, every product line had to prove that it could support itself.
“The core discipline was choosing profit over growth theatre. We refused to spend money we had not earned, and that forced us to maintain clean unit economics,” the founders said.
“We reinvested revenue instead of burning through it, hired only when the cost of not hiring became clear and kept our overheads low.”
Operationally, the company worked with several partners for critical services to prevent a single provider’s failure from bringing the platform to a halt.
Cardtonic also prioritised customer retention over aggressive acquisition. According to the founders, retaining customers costs less and provides stronger evidence that a product is solving a genuine problem.
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