Nigerian fintech startup, Prospa has closed a $3.8 million pre-seed round.
The investors in the round include VCs 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.
Launched in 2019 by Frederik Obasi, Chioma Ugo, and Rodney Jackson-Cole, Prospa is a technology company building the operating system for African entrepreneurs and businesses.
Alongside providing banking services, Prospa offers invoicing tools, inventory management, employee and vendor management, an e-commerce store, and payroll features.
“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,” Frederik Obasi told Techcrunch.
The startup offers business banking for entrepreneurs and freelancers acting as the “operating system” for their businesses.
According to TechCrunch, 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 grand scheme of things, this segment is more of an inroad into an upsell.
In terms of traction, Prospa has tens of thousands of businesses and is growing 35% month-on-month. Then from a non-banking perspective, the company has managed over 150,000 product catalogs while small businesses have sent out 360,000 invoices on the platform.
The company plans to use its new capital to hire more talent and also double down and expand with acquisition strategies to get more customers.
What you should know
In March, Prospa was among the African startups selected for Y combinators winter batch.