There are over 40 million small businesses in Nigeria that are underserved in one form or another in terms of banking services. While some of these companies have registered bank accounts, there are differences in how banks use the available data to meet the needs of individual companies. In the case of banks, all of these companies require that they be presented as a series of transaction reports. They are less interested in providing information and growth opportunities for customers and products.
Fintech startup Prospa is starting to use this market to make a difference. In March, the company entered the top 10 African startups participating in the Y Combinator winter wave. Just months after the closure, the startup, which combines the two worlds of banking and business management tools for micro and small businesses, has completed $ 3.8 million in seed capital.
Frederick Obasi, Chioma Hugo and Rodney Jackson-Cole are the founders of Prospa. As an entrepreneur in Nigeria, Obasi saw how difficult it was to run operations and banking his business.
It’s easy for someone running a large company with significant cash inflows to hire people or buy software that delegates tasks. However, this can be an expensive and challenging task for small businesses. So most of them experience hardships.
Obasi and his team saw the opportunity and launched Prospa with the premise that they could meet the banking and software needs of small business owners at an affordable price point.
Obasi, Hugo and Jackson-Cole developed the product between June and September 2019 and brought it to market in October. Since then, Prospa has quietly attracted clients who have entered YC. Co-founder Obassi explained in a statement that he wants the company to be organic traction, free from overgrown media noise and noise.
However, at the time of its founding, the image of the people of Prospa was that it was a Neobank for Small Business Owners. In addition to banking services, Prospa offers billing tools, inventory management, employee and supplier management, e-commerce stores, and payroll functions.
Prospa helps freelancers and entrepreneurs to act as “operating systems” for their business. Companies registered on the platform have access to account numbers and other features provided by Prospa. For companies not yet registered, Prospa guides you through the process of registering your business and providing a bank account.
Over the past year, African venture capitalists have seen an astonishing number of people across the continent at various stages of investment. For example, Prospa’s upfront investment is the largest in Nigeria and sub-Saharan Africa. In Africa, only Egyptian fintech Telda has made the larger circle.
Obassi believes that the company’s understanding of the market and what it wants to achieve is the main reason for the price hike, which he says has been rewritten almost four times. Investors in this circle include venture capitalists such as Global Founders Capital and Liquid 2 Ventures. The circle also includes founders of global financial technology such as Immad Akhund of Mercury, Karim Atiye of Ramp, and CEOs of Teachable, Square, Facebook and Nubank.
Prospa plans to use the new capital to double its acquisition and expansion strategy to attract more customers. In addition, the company plans to recruit more talent, especially in the food and technology sectors.
