Kendall Ananyi – My LemFi story: A Gem in the ZIRP era
Kendall Ananyi
Last month, LemFi announced their Series B funding of $53 million, marking yet another milestone in their incredible journey. For me, this moment brought a sense of reflection—on how it all started, on the wild ride that was the Zero Interest Rate Phenomenon (ZIRP) period, and on my decision to invest in LemFi.
The exit from LemFi last year was my first from startup investments made during the tail end of the ZIRP era, a time of euphoric optimism in global markets. This period coincided with two landmark events in African tech: Paystack’s acquisition and Flutterwave’s unicorn round. These milestones shone a bright spotlight on the African startup ecosystem, proving the old adage that “a rising tide lifts all boats.”
Globally, the frenzy was palpable: crypto booms, SPAC mania, and a cascade of IPOs dominated the headlines. Valuations soared, optimism felt unstoppable, and the fear of missing out—Peak FOMO—drove decision-making. But like every cycle before it, this one eventually came crashing down.
Having lived through two major economic downturns, I thought we’d collectively be more cautious this time. But history has a way of repeating itself. The two earlier Boom-Bust cycles that shaped my perspective were:
- 2000s Dot-com Crash: I first visited Canada in the year 2000, 2 years before graduation and then quit my first job at PwC Nigeria, moved to Canada for grad school, and graduated just in time to ride the tech boom—until the 2008 crash.
- 2008 Subprime Crisis: I bought a home in Canada just before the Subprime mortgage real estate crash. Holding onto it, I waited for the market to recover, eventually using the proceeds to start angel investing in startups, right up to the 2022 ZIRP crash.
In both downturns, I took outsized personal risks that ultimately paid off. But this time was different. Many misjudged the pandemic-induced downturn as the bottom, assuming 2021–2022 represented recovery. In reality, it was a classic dead-cat bounce—a brief and deceptive recovery in the midst of a decline. By late 2022, the tech industry had plummeted, crypto had tanked, SPACs remained stagnant, and startup valuations were unsustainably high. This made it incredibly difficult for companies to raise funds without accepting down rounds or facing unfavorable terms. Some startups ran out of funding entirely, while others faced investors growing cold feet, hesitant to commit in an increasingly uncertain environment.
Yet, through the chaos, a few exceptional companies emerged—and LemFi was one of them.
The LemFi Connection
In October 2020, a founder approached me for help transferring money to the U.S. Curious, I asked why. He explained that he wanted to invest in a startup called Lemonade, which had already started offering remittance services between Canada and Nigeria.
As a Nigerian-Canadian at the time, I immediately understood the need. Many Nigerians in Canada were desperate for a service to send money home. The founder himself needing a similar service to Lemonade’s service to make his investment was telling—proof they were solving a real problem. It will be similar to a potential investor in Tizeti saying they didn’t have internet access to email their investment documents. It was ironic, but also an unmistakable sign of a huge, untapped addressable market.
Around the same time, Paystack’s exit was fresh in everyone’s minds. My friends and family had told me, “Next time there’s a Paystack-like opportunity, let us know!” I wanted their input before committing, but the timing was unfortunate—this was during the protests in Nigeria. Two days after meeting with the LemFi founder, our oldest office and other POPs were ransacked, and we had to work round the clock to restore service for our customers. As a result, I couldn’t quickly provide feedback on progressing with the investment. By the time I circled back to the founder, the round had closed. Missing out on that round.
Post Paystack Wave
By early 2021, the Paystack exit had opened the floodgates for African startups getting accepted in YC. Valuations skyrocketed. I recall one buzzy African startup in the winter batch announcing a valuation cap seven times higher than my batch or Paystack’s at Demo Day. My BS meter went off—investors were losing sight of fundamentals. Surprisingly, the round ended up oversubscribed, investors in African startups had started to forget how really difficult it is to build and exit African startups if the entry valuation was inflated.
Finally Investing in LemFi
Six months later, Lemonade Finance (later LemFi) got into YC. At Demo Day, despite being a newer batch, their valuation was more reasonable than the winter batch. I heard glowing reviews about the founder and didn’t hesitate to reach out. Without even meeting them in person, I made the investment.
One of the co-founders had graduated from Suleja Academy, a highly competitive Nigerian high school. He also had an impressive track record, having worked at startups like OPay. This pattern of great founders with exceptional backgrounds was something I discussed in my first story on angel investing, “My Paystack Story”. Interestingly, another founder I’d backed and exited had also attended Suleja Academy, so if you meet an alum, you should take a proper look at their deck!
Zirp Era
The ZIRP era was filled with enthusiasm and excitement around African startups. TechCrunch Disrupt in 2022 was a big deal because it was the first time Techcrunch had a pavilion for African startups. Tizeti hosted a dinner for the startups, and we kept expanding the table and increasing the reservation to accommodate the growing number of startup founders in the Valley at that time who showed up. It was a testament to how many startups were building and the percentage of them that were getting funded. Investments were made without even meeting the founders. I finally met the founder on the sidelines of that TechCrunch Disrupt—exactly two years after the initial email introduction and a year after making my small investment in his company.
Exiting Lemfi
Lemonade Finance raised its Series A the next year (2023) and rebranded to LemFi, a much stronger unique name—especially considering how many startups/companies (and even a Beyoncé album) are named Lemonade. The company was thriving. But by 2024, the larger African tech ecosystem was struggling. In fact, there were barely any African startups at TechCrunch Disrupt that year. As the months rolled on, it became painfully obvious that the ZIRP era was over.
Since the Paystack exit, I had averaged an exit every year, but as 2024 unfolded, it started to feel like this might be the year my streak would break. So I was super excited when the opportunity to exit arose. Reflecting on it now, I feel incredibly lucky. Exits used to be rare in Africa but are now increasing in frequency, even though I have had a number of them, it still feels remarkable, given the challenging economic conditions in West Africa and the broader tech industry. I do wish I had invested in the October 2020 round, but to be honest, later-stage startup investments are less risky and have a higher probability of success. So, in the end, it worked out.
Lessons Learned and Reflections
When I reflect on my investment stories, a common thread emerges: the importance of being helpful. Whether it was introducing a bank to startups in Yaba (which led to Flutterwave), Reliance Health in the early days of their pivot, helping with due diligence for Oxio or helping the founder who did the intro to LemFi figure out how to make his initial investment in Lemonade, my best investments often began with simple acts of service to founders. This comes from my own decision to pay it forward and help founders starting their journey after me.
Secondly, the investors who didn’t hesitate to back LemFi in October 2020—despite the challenges in Nigeria at the time—reaped the rewards. This underscores a key lesson: it pays to invest even in uncertain or difficult environments, as periods of recovery inevitably follow.
This year, the U.S. has a new president, and it looks like things may improve for entrepreneurs, technology, and crypto. However, the pause in foreign aid, the end of DEI (diversity, equity, and inclusion) initiatives, and affirmative action create new challenges. Time will tell if this era will be as transformative for African tech entrepreneurs and investors as the last one. What’s certain is that we must reflect on the lessons of the past and position ourselves to seize the next wave when it comes while helping the rest of the startups solving African problems from the ZIRP era.
Here’s wishing this might the year my own investors will share their stories and also I wish the LemFi team continued success as they scale and work toward becoming a unicorn. Their journey reminds me of the resilience, ingenuity, and brilliance of African founders who build against all odds. I’ll be cheering for them every step of the way.