Brass secures $1.7m funding to expand banking solution in Africa
Brass, a Nigerian fintech startup has today secured $1.7million in funding to address the banking needs of local entrepreneurs, traders and fast-growing businesses.
The funding round sees participation from investors which include Olugbenga ‘GB’ Agboola (Co-Founder of Flutterwave), Ezra Olubi (Co-Founder of Paystack, acquired by Stripe), Hustle Fund, Acuity Ventures, Uncovered Fund and Ventures Platform.
The new funding will help 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.
Brass is a digital bank that provides small and medium businesses (SMEs) with a range of products and tools designed to help them grow.
“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,” Sola Akindolu, Co-Founder and CEO of Brass, said.
Launched in July 2020 by Sola Akindolu who was the previous Head of Product at Kudi and Emmanuel Okeke, a former Engineering Manager at Paystack, Brass equips SMEs with a full-stack, commercial-grade banking service across various business classes.
This enables them to gain greater clarity and control over their money operations and the power to scale their enterprises.
The platform currently boasts a comprehensive range of products with the aim of meeting varieties of business banking needs, including credit and payment services, payroll and expense management, application programming interface (API) support and a host of additional core business services.
Brass has served thousands of businesses, disbursed over $2million in credit and recently launched Brass Capital – a cash-flow financing service to support more fast-growing businesses.
Many of Brass’ clients use the platform as their default money operation service provider and its current customer base includes Send.ng, Mono and Eden as well as restaurants, schools and malls.
The platform has also partnered with Flutterwave to drive its expansion plans across Africa.
“At Brass, we’ve made some great strides over the last year in tackling one of Africa’s most critically underserved customer bases but with an estimated $5.1trillion credit gap globally, our work is far from over. This is why we’re 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,” Akindolu said.
Currently, SMEs form 99 percent of all Nigerian businesses however, many of them encounter the same major roadblock that has resulted in 55 – 68 percent of formal SMEs in emerging markets being underserved by financial institutions – 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.
“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,” Kola Aina, Founder and General Partner at Ventures Platform, said.
Access to comprehensive banking solutions services remains one of the most significant constraints for SMEs in Africa as it is estimated that the continent’s formal SME sector has an annual financing gap of over $136 billion.
According to the World Bank, these businesses employ 80 percent of Africa’s population, highlighting their importance to the local economy and further underlining their need for additional support.
“We believe Africa’s entrepreneurial ecosystem, and fintech sector is witnessing an unprecedented shift, and Brass is at the forefront of that, supporting local businesses and professionals with banking technology to supercharge their growth,” Elizabeth Yin, General Partner at Hustle Fund, said.