Prospa, a Nigerian fintech startup, has raised $3.8 million in pre-seed funding to provide banking and software services to small businesses.After deciding to combine the best of both worlds of banking and business management tools for micro and small businesses, this decision was made.
Investors in the round included venture capital firms such as global Founders Capital and Liquid 2 Ventures. Immad Akhund of Mercury, Karim Atiyeh of Ramp, and executives from Teachable, Square, Facebook, and Nubank were among the participants in the round.
Prospa was founded in 2019 by Mr Frederik Obasi, Ms Chioma Ugo, and Mr Rodney Jackson-Cole as a serial entrepreneur with businesses in tech and media.
The company has been reputed to be one of the 10 African startups that participated in Y Combinator’s winter batch in recent months, and since its inception, the company has acquired customers in steathl, even when they were accepted into the Y Combinator.
Prospa was developed to address the banking and software needs of small business owners. It focuses on freelancers and entrepreneurs, including small business owners, and serves as their operating system.
Prospa offers invoicing tools, inventory management, employee and vendor management, an e-commerce store, and payroll features in addition to banking services.Businesses that register on the platform gain access to an account number as well as other Prospa features.
Prospa guides unregistered businesses through the process of formalizing their operations and setting up bank accounts. This segment, however, is more of an inroad into an upsell in the grand scheme of things.
Mr Obasi stated that the company has tens of thousands of businesses and is growing at a rate of 35% month over month.
Prospa has also managed over 150,000 product catalogues outside of banking, with small businesses sending out 360,000 invoices through the platform.According to the firm’s CEO, Prospa is more focused on software than banking and is not to be confused with a neo-bank.
Prospa intends to use its new funds to double down on acquisition strategies in order to gain more customers. In addition, the company intends to expand its workforce, particularly in product and engineering.