Sparkle, a Nigerian fintech founded by an ex-CEO of a former Nigerian incumbent bank, has raised $3.1 million in a seed round to expand operations. Leadway Assurance led this round of investment, which included Trium Network and a few unknown high-net-worth people.
“We’re quite different…because instead of separating financial services from lifestyle, we’ve tried to bring them together, especially as we’ve seen that more people are beginning to lead more digitally-led lives,” CEO Uzoma Dozie said in an interview.
“It means that we don’t see our customers from accounts, payments, deposits or credit perspectives, but from how can we help them do what they want to do at any particular time.” So that’s Sparkle’s pitch — to provide financial, lifestyle and business support services to Nigerians.
Sparkle raised $2 million in a pre-seed round from friends and family earlier this year.
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The startup will put the money into two things: robotic process automation to help with mundane and repetitive tasks, and acquiring talent in engineering, finance, risk, and marketing.
Why The Investors Invested
The investors in this round are mostly Nigerians, and they have backed the founder in particular because of his experience in the Nigerian financial services industry. The founder, Dozie was the CEO and last group managing director of Diamond Bank before joining Sparkle. Prior to its merger with Access Bank, he was in charge of the bank’s corporate, commercial, and retail divisions; the bank today has 29 million customers.
The CEO also maintains a wide network of connections in the financial services which was also instrumental in helping the company procure its operating license from the Central Bank of Nigeria.
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However, the traction that the firm has gained thus far aided in attracting investors in this round. Since its start last year, the neobank has amassed over 40,000 personal banking users and 2,000 enterprises. According to Dozie, the company began collecting minor fees to individual consumers to keep their accounts functioning, and wants to charge businesses for most products except taxation services.
Despite the fact that Nigeria has over 100 million active bank accounts (out of a population of around 200 million), problems such as inefficient service delivery, frequent outages, and bad loans and experiences have led to widespread skepticism of banking institutions.
A Look At What The Startup Does
Founded in 2019 by Uzoma Dozie, Sparkle is a digital bank, licensed as a microfinance bank in Nigeria.
To attract consumers in a crowded market, the business is counting on typical functions like savings, bill payments, top-ups, asking or sending funds, as well as less common capabilities like bill splitting and analyzing spending breakdowns.
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Sparkle Business was launched in April to target a different class of underserved users: small and medium enterprises. This category, according to Sparkle, has taken to the new business arm well, as it now has access to inventory and invoice management, tax advice, and payroll and employee management services.
“As a small business, I’m not carrying my bank account on my mobile. I’m carrying my business. So we are bringing everything about your business into one place so that you can do business wherever you are,” Dozie said. “For individuals, we’re bringing everything into one place so that you can do what you want to do quite easily wherever you are. But the bottom line is that we’re providing you with the information that you need to take spontaneous decisions.”
Sparkle has also partnered with Visa to allow customers to utilize their Visa card to make in-person or digital payments. Network International and PwC Nigeria are two other companies with which the company has partnered.
Nigerian fintech Sparkle Nigerian fintech Sparkle
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer