Brass Raises $1.7M to Expand Nigerian Fintech Services
The Landscape of SME Banking in Nigeria
Over 95% of all businesses operating in Nigeria are classified as small or medium enterprises. However, a significant proportion of these businesses remain underserved by traditional financial institutions, lacking access to the comprehensive financial services essential for growth and expansion.
Beyond simply needing financial products like loans, small and medium businesses also require tools to effectively manage and understand their financial standing. This includes insights into their operations and cash flow.
Introducing Brass: A Fintech Solution
Brass is a Nigerian fintech company focused on addressing these challenges by delivering tailored banking services specifically for small and medium-sized businesses. The company recently secured $1.7 million in funding to broaden its services for “local entrepreneurs, traders and fast-growing businesses.”
Founded in July 2020 by Sola Akindolu and Emmanuel Okeke, Brass benefits from the founders’ prior experience. CEO Akindolu previously led product development at Kudi, a YC-backed company, while CTO Okeke served as an engineering manager at Stripe’s Paystack subsidiary.
Identifying a Critical Need
Akindolu’s time at Kudi revealed the difficulties faced by small and medium businesses in Nigeria. He observed the challenges they encountered in maintaining smooth financial operations and securing vital cash-flow support for tasks like vendor payments, money transfers, and overall business health monitoring.
Despite the presence of existing financial products aimed at SMEs, Akindolu saw an opportunity for a more comprehensive solution.
Differentiating Brass from the Competition
Companies like Sparkle offer both personal and business banking, with a focus on the latter. Furthermore, neobanks such as Carbon and Kuda are progressively incorporating business features for SMEs, and Prospa provides software and banking services to microbusinesses and freelancers.
Akindolu contends that while these alternatives offer certain advantages, they don’t fully encompass the complete banking requirements of businesses as Brass intends to.
“We aim to support businesses’ cash flow, assisting them in areas crucial for maintaining financial stability and continued growth,” Akindolu explained, outlining the core function of Brass. “Our primary focus is on providing financial operations and cash flow support.”
Brass’s Comprehensive Suite of Products
Brass provides a wide array of services, including credit and payment processing, payroll and expense management, API support, cash-flow analytics, team and contact management, and essential business tools like POS systems and debit/credit cards – all integrated within a business bank account.
Credit is a key area of focus for Brass, particularly through its Brass Capital initiative. This sector is gaining momentum, with platforms like Float also offering working capital and software solutions. Brass Capital has already demonstrated success, disbursing over $2 million in credit to two dozen customers during a six-month private beta period.
Akindolu announced that the company plans to publicly launch this service in the near future.
Revenue Model and Customer Base
Brass is establishing itself as a primary financial operations provider for many of its clients. The company generates revenue through credit provision and API usage associated with its core product offerings, according to the CEO.
Currently, Brass serves over 5,000 customers, encompassing schools, shopping centers, restaurants, and even fintech companies like Eden and Mono, who utilize its complete banking solution. The platform is designed to cater to businesses of varying sizes and needs.
“Our goal is to develop a comprehensive suite of financial operation services. We may not be the best fit for very small businesses, but we are primarily targeting small and medium-sized enterprises,” Akindolu stated.
Investor Confidence and Expansion Plans
Ventures Platform, a pan-African VC firm, invested in Brass due to its mission to improve banking access for small businesses, as stated by founder and general partner, Kola Aina.
Additional investors include Flutterwave CEO Olugbenga “GB” Agboola, Paystack co-founder Ezra Olubi, Hustle Fund, Acuity Ventures, and Uncovered Fund.
Previous investment came from Olumide Soyombo of Voltron Capital, Leonard Stiegler, and Fola Olatunji-David.
“We are thrilled to support Sola and the Brass team, who are delivering essential financial technology to businesses across Africa, starting with Nigeria’s 41.5 million businesses,” commented Elizabeth Yin, general partner at Hustle Fund.
Addressing the SME Financing Gap in Africa
The lack of access to comprehensive banking solutions is a significant obstacle for SMEs not only in Nigeria but across major African economies. The continent’s formal SME sector faces an annual financing gap exceeding $136 billion, despite employing over 80% of the workforce.
Akindolu confirmed that Brass intends to allocate a portion of the funding towards expansion into Kenya and South Africa within the next year, having already completed incorporation in Kenya. A strategic partnership with Flutterwave will be instrumental in driving these expansion efforts. Brass also plans to broaden its product portfolio, particularly in the area of credit within these new markets.