Brass, a Nigerian digital bank delivering easy access to affordable premium banking services for small and medium-sized businesses (SMEs), has secured $1.7 million in funding to address the heavily underserved banking needs of local entrepreneurs, traders and fast-growing businesses.
The company in a statement said the Co-founder of Flutterwave, Olugbenga Agboola; Co-founder of Paystack, which has been acquired by Stripe, Ezra Olubi; Hustle Fund; Acuity Ventures; Uncovered Fund and Ventures Platform participated in the financing round.
The new funding, it added, will play a key role in accelerating Brass’ expansion into South Africa and Kenya, “just a year after launch, and will kickstart a range of new product categories, including an expansion of the startup’s footprint in the credit market as it bids to diversify its customer range.”
Launched in July 2020 by Sola Akindolu, who was previously the Head of Product at Kudi and Emmanuel Okeke, former Engineering Manager at Paystack, Brass equips SMEs with a full-stack, commercial-grade banking service across various business classes, enabling them to gain greater clarity and control over their money operations and the power to scale their enterprises. The platform currently boasts a comprehensive suite of products tailored to a wide spectrum of business banking needs, including credit and payment services, payroll and expense management, API support and a host of additional core business services.
To-date, Brass has served thousands of businesses, disbursed over $2 million in credit and recently launched Brass Capital, a cash-flow financing service to support even more fast-growing businesses. Many of Brass’ clients use the platform as their default money operation service provider and its current customer base includes the likes of Send.ng, Mono and Eden, as well as restaurants, schools and malls. The platform has also partnered Flutterwave to drive its expansion plans across Africa.
Commenting on the fundraise, Co-founder and CEO of Brass, Sola Akindolu, said: “The basic needs of Africa’s SMEs are just as significant and unique as those of the customers they serve each day and now more than ever, we need innovative and world-class financial services solutions that meet their expectations. These local businesses have supported our economies for decades, forming the backbone of Africa’s success to-date and now is the time to bet on them.”
Akindolu further said: “At Brass, we have made some great strides over the last year in tackling one of Africa’s most critically underserved customer bases but with an estimated $5.1 trillion credit gap globally, our work is far from over. This is why we are delighted to welcome onboard, a number of vastly-experienced and strategic investors, whose expertise will not only play a vital role ahead of our expansion into South Africa and Kenya, but also in our future ambitions outside of the continent.”
Currently, SMEs form 99 per cent of all Nigerian businesses however, many of them encounter the same major roadblock that has resulted in 55 – 68 per cent of formal SMEs in emerging markets being underserved by financial institutions, resulting to a severe lack of access to affordable, high-quality and uniquely tailored financial services. As a result, these businesses are mainly limited to expensive and often ineffectual traditional banking services or they simply remain unbanked due to access and cost. This has not only led to an estimated $5.1 trillion credit gap for SMEs in Nigeria and other emerging economies, but also a huge lack of resources for these companies to fully understand their financial operations and make critical business decisions.
Narrating how Brass will address SME’s funding challenges, the Founder and General Partner at Ventures Platform, Kola Aina, said: “We were immediately sold on Brass’s mission to make banking work for small businesses. For far too long banks have not worked for their customers. This challenge is even more chronic for small businesses, hence we are excited to be a Brass partner as they advance the mission to make banking work for African businesses, via their suite of products designed to help businesses succeed.”
General Partner at Hustle Fund, Elizabeth Yin, said: “We are excited to back Sola, and the Brass team who are providing critical financial technology to Africa’s businesses, starting with Nigeria.
Managing Partner at Acuity Ventures, Lexi Novitske, said: “The real market opportunity in digital banking in Africa is enabling small businesses, and these businesses are looking for tools to responsibly scale. With a Brass partnership they are able to grow alongside a committed partner for the long term.”