Nigerian bookkeeping and merchant digital platform, Pastel has announced a seed raise of $5.5 million, with the round being led by pan-African venture capital firm TLcom Capital.
Also participating in the seed round are other VC firms like Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play, and Soma Cap also participated in the seed round.
Pastel was able to last year raise a $620,000 pre-seed last year from some of its existing investors as the startup seeks to penetrate the over 40 million small and medium businesses (SMBs) in Nigeria and the larger African population.
Founded by two Nigerians and an Afghanistan native who wereStanford graduate students, Abuzar Royesh, Olamide Oladeji and Izunna Okonkwo, Pastel started off as Sabi Cash with the mandate of building solutions solutions for micro and SMBs in emerging markets, particularly from their countries of origin: Afghanistan (Royesh) and Nigeria (Oladeji and Okonkwo).
Sabi, the startup’s major flagship product is a digital bookkeeping app that gives small businesses the ability to monitor and manage their transactions and customers, get insights into their cashflows, issue receipts, and effectively manage customers who owe them.
According to the Small and Medium Enterprises Development Agency (SMEDAN) report, the small and medium businesses (SMBs) in Nigeria is worth more than $200 billion, consisting of over 40 million businesses of varying sizes. These figures are propellers for Pastel to reach new heights in purchasing inventory from manufacturers while providing solutions to track cash flow, payments, and access capital.
According to one of Pastel’s founders, Izunna Okonkwo, the bookkeeping and customer relationship management the startup launched last year recorded over 100,000 merchant sign-ups by December 2021, with the free app currently having more than 45,000 active merchant users.
Pastel’s bookkeeping solutions is fashioned in a way as to help small businesses streamline processes digitally and save money, in the process staying afloat.
The startup has now recently added more features for merchants to be able to capture more value in this chain.
On Pastel’s decision to build three standalone platforms instead of coupling them all into one general app, Okonkwo has this to say:
“Our thought process was to get traction quickly by solving a merchant’s painpointwith a free and easy solution. The next step was to capture value. So we added value capture features to the Sabi app that our customers love. Now we are building a lot more”.
“The way we’ve thought about it is, 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 any Pastel user can create an account with any of our apps. With the same login they can access all the other solutions that we’re providing”, he added.
It is believed that with this seed round, the company will be able to step up its offerings as it seek to steadily work around SMB’s.