This pre-seed round received by Prospa is, as of now, the largest round of its kind in Nigeria and Sub-Saharan Africa, with Telda, an Egyptian fintech startup, being the only other startup to have raised a larger investment.
Prospa plans to use this new capital to expand by developing and executing acquisition strategies to get more customers. It also plans to hire extra talent, especially in the product and engineering fields.
VCs like Liquid 2 Ventures and Global Founders Capital were investors in the round, while participants were both global fintech founders like Ramp’s Karim Atiyeh, Mercury’s Immad Akhund, and executives from Facebook, Teachable, Nubank and Square.
The fintech startup, which is known for providing both banking and business management tools for micro and small businesses, was one of the 10 African startups that participated in the Y Combinator winter batch.
Prospa was founded by Frederik Obasi, Rodney Jackson-Cole and Chioma Ugo in 2019, and it is focused on entrepreneurs and freelancers, mainly acting as the operating system for their businesses.
Prospa seeks to cater to underserved businesses in relation to banking services by using their available data to serve their needs — providing them with insights and growth opportunities around their customers and products — and tapping into the banking market as well.
The fintech startup does not only offer banking services. It also offers inventory management, invoicing tools, e-commerce stores, employee and vendor management, and payroll features.
It has, since creation, been stealthily growing with more of the growth being based on organic pull than media hype.
Prospa offers registered businesses on its platform access to an account number and other features that it provides, while unregistered businesses go through the process of formalizing their business and providing bank accounts.
The fintech startup has managed over 150,000 product catalogs, has thousands of businesses in its portfolio, is growing 35% month-on-month, and small businesses have sent out 360,000 invoices on its platform.
Speaking on what sets Prospa apart from the “neobank ” tag that people categorized it in, Frederik Obasi, one of Prospa’s founders, said:
“Banking is just a little part of what we do. We know we’re put into the neobank category, but we see our product as 10% banking and 90% software.
So the experience is very much different from what you’d get from a neobank and the use case for Prospa users is quite different.”
He is of the opinion that Prospa’s understanding of the market and vision was the reason it could command such a huge price.
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