Prospa which recently graduated from Y Combinator, one of the most prominent start-up accelerators in the world, has raised a pre-seed round of USD3.8million. The company’s model is to help small scale businesses in Africa in managing their banking and business on a single platform.
Prospa was founded in October 2019 by Frederik Obasi, Chioma Ugo, and Rodney Jackson-Cole. The company hoped to assist small and micro businesses to consolidate all the moving parts of their business management like inventory and invoicing, employee management and banking into one single software application.
The equity capital raise will be used to expand the company’s customer base and hire more product and engineering talents. The raise by the company is the largest ever in Sub–Saharan Africa.
The raise saw participation from Global Founders Capital and Liquid 2 Ventures. Angel investors including Immad Akhund of Mercury, Karim Atiyeh of Ramp, and executives from Teachable, Square, Facebook, and Nubank also participated in the round.
This raise by Prospa indicates that the company has a strong business model and growing users. Industry sources put current user businesses at over 10,000 ; over 150,000 product catalogues and over 360,000 invoices have been dispatched from the platform.
The company is said to be growing at a 35% month-on-month rate. It’s subscription rate varies according to customers’ turnover. For instance, a business with a turnover of NGN100,000 (USD200) or below won’t be charged a subscription fee. But it charges between NGN3,000 (USD6) and NGN5,000 (USD10) monthly on businesses with turnovers exceeding NGN100,000.
There is a rise in the number of startups building solutions for the 41 million SMEs in Nigeria and helping them move and manage their business online. Although this sector of the tech ecosystem is nascent, competition is growing. Other players include Sabi and Bumpa.