There is no end to the use of technology in the traditional retail sector in sub-Saharan Africa. According to reports, the industry in Nigeria is worth more than $200 billion.

Traditional retail in the country consists of small kiosks and open-air markets selling various products. B2B digital marketplace upstarts have raised millions of dollars to help thousands of businesses purchase inventory from manufacturers while providing solutions to track cash flow, payments, and access capital Software and apps are provided by another group of startup to assist retailers with their accounting and sales processes.

A startup in the second category which has been under the radar for more than a year is announcing a seed raise led by a pan-African firm. The seed round was participated in by other VC firms. A $620,000 pre-seed was raised by the startup.

According to co-founder and chief growth officer (CGO) Okonkwo, Abuzar Royesh, Olamide Oladeji, and Izunna Okonkwo shared the same interests in building solutions for the company.

The company's flagship product is a digital bookkeeping app that allows small businesses to monitor and manage their transactions and customers.

Small businesses in Nigeria have been offline for a long time, storing information on paper or ledgers. Nine out of 10 small businesses in the country don't survive the first five years because of inefficiencies and other issues. Businesses can save money by using accounting solutions.

Izunna Okonkwo, Olamide Oladeji, and Abuzar Royesh are pictured.

Over 100,000 merchant sign-ups were recorded by December 2021. The free app is used by more than 50,000 merchants. More features for merchants have been added by Pastel. Unlike other platforms that have bundled features into one app, Pastel chose a different strategy and made each product their own.

The thought was to get traction quickly by solvi ng a merchant's pain point with a free and easy solution. The next step was to get value. We added features that our customers love. The company decided to build three separate platforms instead of a single app. As opposed to creating a super app that a lot of other fintechs have or are in pursuit of, we are taking a more platform approach, meaning that anyone can create an account with any of our apps. They can use the same login for all the other solutions.

The Quick Receipt app is used by over 60,000 merchants. The Swift Money app, which uses local saving groups in Nigeria to provide financing for businesses, has been stealthily built for the last three months.

Ajo or esusu is a popular financial scheme in Nigeria where a group of peopleContribute money in varying intervals to a leader who stores the cash on their behalf They can use this activity to save towards a specific goal or access a large pool of credit.

Swift Money is designed to work with established ajo leaders. Pastel doesn't aim to replace these leaders, but rather give them with to help track their groups well-being as well as give financing for the group members. The leader downloads the app to set up profiles for members and also engages with the formality of cash collection and depositing cash in aPastel bank account for savings. The leader requests on the app that the member be evaluated based on their saving history and if credit worthy, a business loan is disbursed to them.

The leader is in charge of remembering the loans to the pas tel account, just like they have always done their savings collections.

Pastel charges interest and a small fee on these loans and has access to savings to use as a float for loan financing. The company plans to raise debt capital in the new year. We have not scaled out our loan product.

There is more than one startup operating in this line of business. Several startups across West Africa have ventured to serve small and medium businesses with bookkeeping tools and credit. Okonkwo argues that Pastel is different from others because of its product-focused approach.

The co-founder said that they are taking a product-led growth approach, where they iteratively research how users are using the solutions and what they are asking for. The new capital will help Pastel increase its efforts in this area as it looks to expand its product offerings and develop more productivity and finance management features and tools for small businesses.

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