1.2 C
London
Thursday, February 9, 2023

Pastel, a Nigerian accounting and digital platform for traders, raises $5.5 million led by TLcom – londonbusinessblog.com

Must read

South Korean minister sacked for falling in love with Halloween crowd

SEOUL, South Korea — The opposition-controlled South Korean parliament on Wednesday voted to impeach Interior and Security Minister Lee Sang-min, holding him accountable for...

Nintendo releases trailers for new Zelda and Pikmin games • londonbusinessblog.com

Nintendo hosted a 45-minute Nintendo Direct live stream on Wednesday, revealing upcoming games and updates for Nintendo Switch. As many players expected, Nintendo shared a...

Google announces global rollout of AI-powered ‘multisearch’ on mobile devices • londonbusinessblog.com

To get a roundup of londonbusinessblog.com's biggest and most important stories delivered to your inbox every day at 3PM PST, register here. Hello crispy treats, I...

Lee Soo-man is suing SM Entertainment for violating the agency’s rules

Lee Soo's agent, Hwawoo Legal Firm, released a statement on February 7 outlining his position on suing SM Entertainment for violating corporate rules. ...
Shreya Christinahttps://londonbusinessblog.com
Shreya has been with londonbusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider londonbusinessblog.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

There is no end to the digitization of small and medium-sized businesses (SMEs) in traditional retail in sub-Saharan Africa. In Nigeria alone, this industry, valued at over $200 billion, is made up of more than 40 million companies of various sizes, according to reports.

The traditional retail industry in the country consists of small kiosks and open-air markets that sell a variety of products from food and drinks and groceries to personal care products and stationery. Startups in the B2B digital marketplace such as TradeDepot, Sabi and Omnibiz have raised millions of dollars to help thousands of these companies purchase inventories from manufacturers while providing solutions to track cash flow, payments and access to capital. Meanwhile, another group of startups is providing software and apps to help these retailers with their accounting and sales tracking processes, among other things.

Pastel, a second-tier startup that has been under the radar for more than a year, is announcing a $5.5 million seed-raise led by pan-African venture capital firm TLcom Capital. Other VC firms such as Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play and Soma Cap also participated in the seed round. The startup raised a $620,000 pre-seed last year from some of its existing investors.

Pastel, formerly Sabi Cash, was founded by Abuzar Royesh, Olamide Oladejic and Izunna OkonkwoStanford graduates who, according to co-founder and chief growth officer (CGO) Okonkwo, in an interview with londonbusinessblog.com, shared similar interests in building solutions for micro and SMBs in emerging markets, particularly from their countries of origin: Afghanistan (Royesh) and Nigeria (Oladeji and Okonkwo).

The company’s flagship product, Sabi (not to be confused with a B2B e-commerce marketplace of the same name), is a digital accounting app that allows small businesses to track and manage their transactions and customers, understand their cash flows, issue receipts, and effectively manage customers who owe them something.

Small businesses in Nigeria have been offline for years, preserving information and vital data from hand, on paper or in ledgers. All these inefficiencies are not only time-consuming, but also lead to errors and affect cash flow and finances. That’s why nine out of ten small businesses in the country disappear in the first five years. Accounting solutions like Pastel’s help these companies digitally streamline their processes and save money.

LR: Izunna Okonkwo (CGO), Olamide Oladeji (CPO) and Abuzar Royesh (CEO)

Accounting and customer relationship management Pastel, launched last year, registered more than 100,000 sales reps in December 2021, Okonkwo said. The free app currently has over 45,000 active sellers. Pastel has recently added more features for merchants to get more value in this chain. However, unlike other platforms that have bundled several features into one app, Pastel has chosen a different strategy and made each product standalone: Fast reception and Pastel financing.

“Our thinking process was that once we got to grips with, the next step was to capture some value. So we added features to the Sabi app and what we’re building now is something more,” Okonkwo said of the decision of the company to build three standalone platforms rather than linking them all into one app.” The way we’ve thought about it is that, unlike making a super app that many other fintechs have or aspire to, we take a more platform approach which means that any Pastel user can log in to any of our apps with the same login and access all the other solutions we offer.”

The Quick Receipt app provides businesses with easy billing and receipts tools and more than 60,000 active merchants. On the other hand, the SwiftMoney app, which uses local savings groups called ajo in Nigeria to fund businesses, has been secretly built over the past three months through Pastel Financing.

Ajo or esusu is a popular financial scheme in Nigeria where a group of people contribute money at different intervals to a leader who stores the money on their behalf. They may have various goals for participating in this activity, such as saving for a particular purpose or accessing a large pool of credit.

The ajo groups on Pastel have a leader who not only deals with the formalities of cash collection and depositing cash in a [Pastel] bank account, download the app to set up profiles for members. So when one of the members (in this case merchants) wants to access loans, the leader asks for the app and then sends the money to them before collecting the repayments when they are due.

Pastel has only recently started making income and does so by charging interest and a small fee on these loans; it also has access to savings to use as a loan financing lender. The one-year-old company plans to raise debt by January to supplement this process, Okonkwo said. “We have not increased now because we have not expanded our loan product. But the plan is that by January, once we expand much faster, we will go into debt or partner with an existing debt player, and then become the origination tool.”

US-based and Lagos-based Pastel is not the only startup operating in this industry. Over the past 24 months, several startups in West Africa, including Kippa, have bumpa (which recently) launched a social commerce integration with Meta), OZÉ and Bamba, have dared to serve small and medium businesses with accounting tools and credit. While they offer nearly identical features such as bookkeeping, inventory management and sales tracking, Okonkwo argues that Pastel’s product-centric approach sets the company apart from others.

“As a team, we are taking a product-driven growth approach where we iterate after massive research into how users are using the solutions and what they are asking for,” said the co-founder. The new capital will help Pastel increase its efforts in this area as it seeks to expand its product offering and develop more productivity and finance management features and tools around group savings, loans and payments for small businesses.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article

South Korean minister sacked for falling in love with Halloween crowd

SEOUL, South Korea — The opposition-controlled South Korean parliament on Wednesday voted to impeach Interior and Security Minister Lee Sang-min, holding him accountable for...

Nintendo releases trailers for new Zelda and Pikmin games • londonbusinessblog.com

Nintendo hosted a 45-minute Nintendo Direct live stream on Wednesday, revealing upcoming games and updates for Nintendo Switch. As many players expected, Nintendo shared a...

Google announces global rollout of AI-powered ‘multisearch’ on mobile devices • londonbusinessblog.com

To get a roundup of londonbusinessblog.com's biggest and most important stories delivered to your inbox every day at 3PM PST, register here. Hello crispy treats, I...

Lee Soo-man is suing SM Entertainment for violating the agency’s rules

Lee Soo's agent, Hwawoo Legal Firm, released a statement on February 7 outlining his position on suing SM Entertainment for violating corporate rules. ...

Most people can tweet again, but Twitter is still having problems

However, Twitter seems to be recovering from technical issues that prevented people from tweeting problems with DMsand access to TweetDeck still seems to persist....