Prospa Raises $3.8m to Expand Banking, Software Services

By Sodeinde Temidayo David

Nigerian Financial technology startup, Prospa, has secured a total of $3.8 million in pre-seed funding round to offer small businesses banking and software services.

This was made after the decision to combine both worlds of banking and business management tools for micro and small businesses, incorporating agency banking solutions.

The round was led by investors which include venture capitals like global Founders Capital and Liquid 2 Ventures. Founders of global fintech like Mercury’s Immad Akhund, Karim Atiyeh of Ramp, and executives from Teachable, Square, Facebook and Nubank also participated in the round.

Founded by Mr Frederik Obasi, Ms Chioma Ugo and Mr Rodney Jackson-Cole in 2019, Prospa was unveiled as a serial entrepreneur running businesses in tech and media.

In recent months, the company has been reputed to be one of the 10 African startups which participated in Y Combinator’s winter batch and since its launch, the firm acquired customers in stealth even when they got into the Y Combinator.

Made to solve the needs of small business owners in banking and software, Prospa focuses on freelancers and entrepreneurs, including small business owners, acting as the operating system for their businesses.

Alongside providing banking services, Prospa offers invoicing tools, inventory management, employee and vendor management, an e-commerce store, and payroll features.

Registered businesses on the platform get access to an account number and other features Prospa provides.

For unregistered businesses, Prospa takes them through a process of formalizing their business and providing bank accounts. However, in the magnificent structure of things, this segment is more of an inroad into an upsell.

Talking on traction, Mr Obasi disclosed the company has tens of thousands of businesses and is growing 35 per cent month-on-month.

And from a non-banking perspective, Prospa has managed over 150,000 product catalogues while small businesses have sent out 360,000 invoices on the platform.

According to the firm boss, Prospa is more into software than the banking aspect and is not to be mistaken for a neo-bank.

Prospa plans to use its new capital to double down and expand with acquisition strategies to get more customers. In addition to that, the company plans to hire more talent, especially in product and engineering.