Sparkle, a Nigerian digital bank has raised $3.1 million in a seed funding round to scale operations.
The round was led by Leadway Assurance with participation from Trium Network and a few unnamed high-net-worth individuals.
The investment comes after Sparkle closed a friends and family pre-seed round of $2 million within the past year.
What Sparkle does
Sparkle was founded in 2020 by Uzoma Dozie, a former CEO of Diamond Bank. He oversaw the bank’s corporate, commercial and retail arms before its merger with Access Bank.
Sparkle is a digital bank with standard services like savings, bill payments, top-ups, requesting and receiving money, bills splitting, expenditure breakdowns, etc.
Since its inception last year, the neobank has amassed over 40,000 personal banking users and 2,000 businesses. The company began collecting small fees to individual users to keep their accounts operating and aims to charge companies for most functions except taxation services.
In April, the company launched Sparkle Business to target a new category of underserved users: small and medium enterprises. This category has taken to the new business arm well since it now has access to inventory and invoice management, tax guidance, and payroll and personnel administration services TechCrunch reported.
These businesses can use these features by providing a tax identification number (TIN) and an email address, which is the simplest form of paperwork available.
Sparkle has some features that customers may not find on other platforms. Customers may, for example, verify the transaction history with a certain beneficiary without having to go through a financial statement, validate the place where they made each transaction, and plan payments without having to go through a financial statement.
While he could have sought money from international investors, Dozie believes he selected this group because they had the knowledge and market that Sparkle needs to expand in Nigeria. He was also interested in enlisting the help of high-net-worth individuals to invest in a technology company.
“Collectively, as a group of investors and business builders, we are Nigerians who are bullish about Nigeria and the opportunity the country presents in terms of building global networks and communities, all via one app,” the CEO said in a statement.
Sparkle will utilize the funding for two things, developing robotic process automation to aid with mundane and repetitive operations, and hiring talents in engineering, finance, risk, and marketing.