A Nigerian startup called Kippa has raised $8.4 million in a seed round.
The startup — launched last June by Kennedy Ekezie-Joseph, Duke Ekezie and Jephthah Uche — received investment from backers such as Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, Crestone VC, VentureSouq, Horizon Partners and Vibe Capital. Kippa said the investment will allow it to develop financial products that help SMEs grow their businesses and grow its team in Nigeria.
The company received a pre-seed from Target Global.
Small and medium businesses in sub-Saharan Africa can use Kippa for their accounting needs. There are similar providers in the sub-Saharan region.
Many of these businesses used to run their operations with pen and paper or ledgers. Nine out of 10 small businesses fail in the first five years because of inefficiencies and errors, which is because they are time-Consuming.
The traditional retail sector in Nigeria is worth more than $200 billion and there are many small businesses that operate in this area. Small business owners can keep track of their daily income and expense transactions with the help of Kippa. In an interview with CEO Ekezie-Joseph, he said that there were over 130,000 active businesses in the area. Ekezie-Joseph didn't say how many people were active on the platform.
There is an extensive distribution network for any company that provides services to thousands of small and medium businesses in Nigeria. The company's merchants are spread across all 774 local governments in Nigeria, and it has made strides in what it provides to merchants.
Nigeria’s Kippa gets $3.2M pre-seed for its small business finance management app
Most small businesses in Nigeria aren't formally registered due to costs and complexity. A few months ago, Ekezie-Joseph described a product that was one of the fastest for small businesses to use. According to Ekezie-Kennedy, his platform has built a product that will allow businesses to register in 3 days for N15,000. The CEO said that this feature forms the basis of their plans to stack financial products.
The company announced last week that it had obtained a licence from the Central Bank of Nigeria to operate as a Super Agent. Merchants on the platform can act as agents and offer financial services such as cash withdrawals and deposits, bank account opening, bills and utility payments, and insurance to individual customers who come to their small shops regularly.
Ekezie-Joseph said there are a lot of opportunities for them to do more for merchants on the app. Merchants and typical neighbourhood shops who already use our bookkeeping app into a one-stop-shop for their customers can use the super agent licence.
It's important for a young company to get the best hands to drive its efforts because they have more than tripled what they had last November. The finance management platform has recruited ex-regulators and senior executives at several startup companies. Toyin Albert as executive director of payments services, Osagie Alonge as director of marketing, and N Ajao as chairman are some of the others.
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In a full year, Kippa has raised over 11 million dollars. The company and its competitors have convinced investors that the market they serve is large for everyone to compete in. According to reports, almost 50 million business owners run small and medium enterprises in the country. Credit is the glue that holds everything together as these platforms pitch different approaches to businesses. The credit and lending arm, which the CEO predicted last year would be a revenue generator for the company, has been put on hold for the time being.
Credit is still an enormous opportunity for us. While we have a lending licence in Lagos and Abuja, we are building out the arms of the business that provides and continue to expand transactional data that we have on businesses. When we start lending, this will allow us to build a healthy loan book.
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