Nigerian fintech startup, Traction, today announced a $6 million seed round. With the new funding, Traction will be looking at accelerating its growth in Nigeria, strengthening its team, and driving expansion outside Nigeria. The investment was anchored by Pan-African investor Ventures Platform and Multiply Partners, with participation from P1 Ventures and other investors.
Founded in 2020 by Mayowa Alli and Dolapo Adejuyigbe, Traction provides an app that business owners can use to accept payments, generate invoices, manage inventory, and track payments. It also enables the merchant’s employees to confirm payments without having to call their employer.
Mayowa Alli and Dolapo Adejuyigbe, Traction Apps Co-founders, met while working together at McKinsey & Company. Alli would later leave the company but return after a stint at Konga and completing his MBA at the Institut Européen d’Administration des Affaires (INSEAD) in France.
That has been our thesis from day one. It was like an organic product journey built from what we had understood, interviewing and meeting prospective SMEs or customers. What that affirmed was essentially like an offline merchant acquiring model that we’ve also seen in the U.S. with Square, in Latin America with StoneCo, in Europe with SumUp, and BharatPe in India. It’s a clear playbook that has guided what we’ve built to date.
Dolapo Adejuyigbe, Traction co-CEO
Micro, small, and medium-sized firms (MSMEs) constitute the backbone of the Nigerian economy, accounting for more than 60% of GDP growth and playing a crucial role in job creation. According to the National Bureau of Statistics, there are over 39 million such firms, and 87% operate informally, meaning they primarily receive cash and perform activities on paper.
Dolapo Adejuyigbe, the startup co-CEO, noted when quizzed about Traction’s position in the merchant acquiring space:
From day one, our entire system and design was tailored for merchants. We’re not building or getting into software; we already have that software and merchants are actively using it. So we’d like to think we’re multiple steps ahead regarding an actual product proposition for business owners.
Considering that it’s now armed with enough capital, the startup, which has a payments solution services license that allows it to operate as a payment solution provider across various payment categories, will look to accelerate its growth in Nigeria, strengthen its team, and drive expansion outside Nigeria, per a statement. “The way we play in other countries might be different. But essentially, it’s the same goals we want for retail SMEs,” Adejuyigbe commented.
