Nigerian financial management app gives 8.4 million dollars in new funding to entrepreneurs Kipa • TechCrunch

Kipa, a Nigerian startup improving the lifecycle of small businesses across the country with a financial management and payment platform, has raised $8.4 million in a subscription round.

Start – last June at Kennedy Ekezie-Joseph, Duke Ekesse And Jephthah Uche – Received investment from backers such as Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, Crestone VC, VentureSouq, Horizon Partners and Vibe Capital. Kipa said the investment will enable it to develop financial products that will help SMEs grow their businesses and grow the group in Nigeria.

The company announced last November that it had raised $3.2 million in pre-seed funding from Target Global and other investors.

Kipa is one of many accounting platforms for small and medium businesses in sub-Saharan Africa. Similar suppliers in sub-Saharan Africa include Pastel, Bamba, OZN and Bumpa.

Before such solutions, many of these businesses did things like cash management, inventory tracking, and employee and supplier records offline, primarily with pen and paper or letters. All of these inefficiencies, in addition to taking time, lead to errors and affect cash flow and finances, which is why almost nine out of 10 small businesses fail in the first five years.

As a result, startups have launched various accounting solutions to digitize these small businesses in Nigeria’s over $200 billion traditional retail sector. With Kipa, small business owners can track their daily income and expense transactions, create invoices and receipts, manage inventory, and generally monitor how their business ebbs and flows over time. In an interview with CEO Ekezi-Joseph last November, Kipa said it has more than 130,000 active businesses, ranging from small kiosks and street shops to local food vendors and high-end merchants. Although the platform has grown to accommodate more than 500,000 small businesses, Ekezie-Joseph did not say how active they have been.

Any company that caters to thousands of small and medium businesses in different cities in Nigeria has an extensive distribution network to build new products on. And in the case of Kipa – the company’s dealers are spread across 774 local governments in Nigeria – it has made meaningful strides in its offerings to dealers.

Most small businesses in Nigeria are not formally registered due to the cost and complexity of navigating the entire process. So, first, Kipa launched what AKZ-Joseph described as one of the fastest growing integration products for small businesses a few months ago. “We have built a product on the existing Kipa product that allows businesses to register for N15,000 within 3 days,” Ekezie-Kennedy said, pointing to the option of the platform to help these businesses get legally incorporated. This feature will form the basis of Kipa’s plan to stack financial products apart from attracting more demand and generating more revenue, the CEO added.

Last week, the company announced that Apex Bank of Nigeria has received approval from the Central Bank of Nigeria (CBN) to operate as a super agent, just like agency banking players Opai and Team Apt. With the license, merchants on the Kipa platform can act as agents and provide financial services such as withdrawals and deposits, bank account opening, bills and utility payments, and insurance to customers who frequent their small shops. Make daily purchases.

“We have over 500,000 merchants on our app and we have many opportunities to do more for them and provide more financial services,” said Ekezi-Joseph. “The Super Agent license allows merchants and convenience stores to already use our accounting application as a one-stop shop for their customers’ essential financial services.”

For this fast-growing young company, finding the best hands to drive its blitzscaling efforts is critical — Kipa says annualized sales on the platform are up tenfold from last November to $3 billion. For this, the financial management platform has hired former regulators and senior executives from startups such as OPay, BharatPe, Khatabook, TeamApt, OKCredit, NIBSS and Unified Payments. Some of them include Toyin Albert, Director General of Payment Services, Osagie Along, Director of Marketing and former Deputy Director General of the Nigerian Inter-Bank Settlement System (NIBSS), Niyi Ajao as Chairman.

Kipa has raised more than $11 million in its one year of operation. The company and its competitors have convinced investors that the market each player serves to co-exist is vast. He pointed out that an estimated 49.3 million business owners run SMEs in the country. But because these platforms offer different approaches to business — accounting, supplier relationships, banking and software services — credit is the glue that makes it all stick together. However, Kipa’s lending and credit arm, which the CEO predicted last year as a revenue generator for the company, has been temporarily put on hold, which is expected to soon affect the start-up’s interest in running small businesses. Financial service provider.

“Credit continues to be an incredibly big opportunity for us. And while we have credit licenses in Lagos and Abuja, we’re spending our time building business arms and expanding our business intelligence. This will allow us to build a healthy credit book when we start lending.”