An all-Nigerian group of investors is leading a $3.1 million (N1.3 billion) seed round in Sparkle, a mobile-first digital bank that provides financial, lifestyle, and business support services to Nigerians across the globe.
The funding round which was oversubscribed has an exclusive list of local investors including Leadway Assurance, Trium Networks, and a number of high net-worth individuals (HNIs). Sparkle has previously raised a $2 million (N857 million) pre-seed round from friends and family which now brings its total funding to $5.1 million (N2.1 billion).
Sparkle says it will deploy the new investment in scaling talent teams across engineering, financial risk, and marketing departments. It plans to also invest in an automated backend process and digital infrastructure.
Founded in 2019 by Uzoma Dozie, former CEO of defunct Diamond Bank, Sparkle has grown on its mobile app a digital-first tribe of users who have access to features such as savings, bill payments including airtime, cable, utility, transport top-ups, the ability to request or send funds, split bills, review spending breakdowns, among others. The company has seen triple-digit growth between 2020 and 2021
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Sparkle said it is now ready to focus on connecting Nigerians and the Nigerian diaspora by building a different type of financial services platform that is more than just banking, but a means of improving the financial lifestyle of its users, allowing for borderless transactions.
“Collectively, as a group of investors and business builders, we are Nigerians who are bullish about Nigeria and the opportunity the country presents in terms of building global networks and communities, all via one app,” Dozie said.
Sparkle has been deepening its business-to-business segment with the launch of Sparkle Business in April 2021. The business platform targets macro and small-medium enterprises and mid-sized ventures offering them automated inventory and invoice management, a payment gateway service, tax advisory and calculations, and payroll and employee management services. Businesses do not require documentation to open an account on Sparkle Business. Registration requires a personal Sparkle account, Tax Identification Number (TIN), and an email address connected to their TIN.
Nigerian investors have been increasing their involvement in the funding activities in the tech ecosystem in the country. However, there are not many funding announcements above $1 million that have Nigerian investors as co-lead much more completing the round without help from foreign investors or foreign-backed venture capital firms based in Africa. As a result, foreign investors dominate the funding activities in Nigeria accounting for over 90 percent of investments as of the first half of 2021 according to a report by Techpoint Africa.
Future Africa is one of the few that has co-led a funding raise this year with the $1.5 million seed round in Termi, a Nigerian communications platform-as-a-service startup.
I’m delighted to be collaborating with a group of highly respected Nigerian businesses, investment firms, and captains of industry – all of whom understand the real need for a digital-first platform such as Sparkle, to bring better access to financial services and, importantly, financial inclusion, to millions more people,” Dozie said.
Sparkle users are able to open an account in less than five minutes via a Smartphone, without the need for documentation or in-person / banking hall verification. The platform also has a Visa card function for users to make in-person or digital payments. The platform has also secured partnerships with Visa, Network International, PriceWaterHouse Cooper Nigeria and secured a Microfinance Bank licence from the Central Bank of Nigeria (CBN).
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