NIGERIA – Prospa, a fintech startup, has closed a US$3.8 million pre-seed funding round to help it accelerate customer acquisition, expand its team with a focus on product and engineering and further develop its product suite.
Prospa took part in the Y Combinator accelerator earlier this year, and the US$125,000 banked there is part of this US$3.8 million round, which the startup claims is the largest pre-seed amount yet raised by any Nigerian startup and was oversubscribed by 380 per cent.
“At Prospa, we believe that successful small businesses can foster prosperity for Nigerians everywhere. Our goal is to power every Nigerian entrepreneur so that they achieve scale. This is the opportune moment: we’re seeing a huge demand for our service,” said Frederik Obasi Obasi, Prospa’s chief executive officer (CEO).
The round was backed by venture funds Global Founders Capital (GFC) and Liquid 2 Ventures. Leading entrepreneurs also participated in the round including Mercury’s Immad Akhund, Ramp’s Karim Atiyeh, Teachable’s Ankur Nagpal, Todd Goldberg and Rahul Vohra’s angel investment fund, and executives from Square, Facebook and Nubank.
“The Prospa team is building a world class product that is tailored to the needs of Nigeria’s entrepreneurs. They have executed brilliantly and we’re happy to partner with Prospa on their journey to become the OS for Nigeria’s entrepreneurs and micro-businesses,” said Don Stalter, GFC head of North America.
Founded in 2019 by Frederik Obasi, Chioma Ugo, and Rodney Jackson-Cole, Prospa provides banking and software services for micro-businesses, allowing users to open a fully operational bank account in five minutes and also offering access to a suite of tools such as invoicing, inventory management, employee payroll, an e-commerce platform and an analytics dashboard.
The startup already has thousands of users who pay a monthly subscription fee and is growing its user base by 35 per cent month-over-month. Users have so far sent 360,000 invoices and logged 20,000 unique inventory items monthly on the platform.
Registered businesses on the platform get access to an account number and other features Prospa provides. For unregistered businesses, Prospa takes them through a process of formalizing their business and providing bank accounts. However, in the grand scheme of things, this segment is more of an inroad into an upsell.