Small and medium enterprises make up over 95% of all businesses in Nigeria. But despite their size and importance, the majority of them are underserved by financial institutions and lack the full range of financial services needed to grow their operations.
In addition to complete financial needs, including credit, small and medium-sized businesses require other essential resources to understand their financial operations.
Brass is a Nigerian fintech tackling these challenges by providing banking services to small and medium businesses. The company has secured a funding round of $ 1.7 million to expand its offerings to “local entrepreneurs, merchants and fast-growing businesses.”
Sola Akindolu and Emmanuel Okeke founded Brass in July 2020. Prior to Brass, CEO Akindolu was the product manager at Kudi, supported by YC, while the technical director Okeke was the engineering director at Paystack, a subsidiary of Stripe.
Akindolu’s work at Kudi opened his eyes to the issues facing small and medium-sized businesses in Nigeria. He explained that he had discovered how difficult it was for these companies to have transparent financial operations and cash flow support services as an integral part of tracking vendor payments, money movements and globally business health.
But why launch Brass when there are products in the Nigerian market that SMEs and entrepreneurs can use? Sparkle, for example, offers banking services to individuals and businesses (with more priority on the latter). Carbon and Kuda consumer neobanks are at various stages of providing business functionality to SMEs. Prospa, a YC-backed company that doesn’t like to think of itself as a neobank, also provides software and banking services to micro-businesses and the self-employed.
Akindolu believes that while these products have their entry points into the SME market, they do not cover all of the banking needs of companies like Brass.
“There are a lot of ways that money can flow out of the business, whether it’s payroll, paying vendors, invoicing. We want to support the cash flow of companies; we want to support them in these areas to make sure that the money keeps flowing and that they can continue to grow their business, ”Akindolu said, describing Brass’s candidacy. “So this is largely what we do with Brass today: financial operations and treasury support.. “
Brass offers a suite of products – credit and payment services, payroll and expense management, API support, cash flow analysis, team and contact management, other core business services such as point of sale, debit and credit cards – all around a business bank account. .
Among all these features, Brass is betting big on credit with Brass Capital, a space that is already heating up with other platforms such as Float, which provides working capital and software services to businesses. That said, Brass Capital did pretty well in a short period of time; The treasury finance department claims to have disbursed more than $ 2 million in credit after being used for six months by two dozen Brass customers in private beta.
Akindolu told TechCrunch that the company will be making the service available to the public soon..
Brass says many of his clients use the platform as their default currency trading service provider. FinTech Make Money By Providing Credits And API Calls On Its Regular Product Offering, CEO Says.
It has more than 5,000 customers ranging from schools and shopping centers to restaurants and fintechs like Eden and Mono, who use its complete banking solution. And youLike other platforms, Brass tries to optimize its platform for different levels of businesses with different needs at the same time.
“What we set out to do is create stacks of financial operations services. We are perhaps exaggerated for a micro enterprise; they might not find us useful, so we’re more concerned with small and medium businesses.
The mission to make banking services for small businesses work was one of the reasons pan-African venture capital firm Ventures Platform invested in the business, according to its founder and general partner, Kola Aina.
Other investors include Flutterwave CEO Olugbenga “GB” Agboola, Paystack co-founder Ezra Olubi, Hustle Fund, Acuity Ventures and Uncovered Fund.
Previous funders include Olumide Soyombo from Capital Voltron, Leonard Stiegler and Fola Olatunji-David.
“We are excited to support Sola and the Brass team, which provide essential financial technologies to African businesses, starting with Nigeria approximately 41.5 million companies, ”said Elizabeth Yin, general partner of Hustle Fund.
It’s not only in Nigeria that access to comprehensive banking solutions services continues to be one of the most important constraints for SMEs – these are most of Africa’s major economies. Indeed, the formal SME sector on the continent has an annual financing gap of more than $ 136 billion, while they represent more than 80% of the working population.
For this reason, Akindolu has claimed that Brass will use part of the funding to expand its business in Kenya and South Africa by next year (it has finalized the incorporation into the former). A partnership with Flutterwave is integral to driving its expansion plans across Africa, the company formed a year ago said in a statement. Brass also plans to diversify its customer base by launching more product categories, particularly around credit in its markets.