Kippa, a Nigerian startup whose finance management and payments technology improves the lifecycle of small companies throughout the country, has secured $8.4 million in an oversubscribed seed round.
Kennedy Ekezie-Joseph, Duke Ekezie, and Jephthah Uche founded the company in June of last year. Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, Crestone VC, VentureSouq, Horizon Partners, and Vibe Capital were among the investors. The investment, according to Kippa, will allow the company to develop financial solutions that assist SMEs in growing their enterprises and expand its staff in Nigeria.
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Last November, the company secured a $3.2 million pre-seed investment from Target Global and other investors.
Why The Investors Invested
Since its inception, the firm has achieved significant traction. In November of last year, Kippa’s CEO Ekezie-Joseph reported that the city has over 130,000 active enterprises, ranging from modest kiosks and street corner stores to local food sellers and high-end retailers. Although the network has expanded to accommodate more than 500,000 small enterprises, Ekezie-Joseph does not specify the number of active users. In addition, Kippa asserts that the platform’s yearly transaction volume has surpassed $3 billion, tenfold that of November.
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The business said last week that it has secured a licence from the Central Bank of Nigeria (CBN) to operate as a Super Agent, similar to agency banking players OPay and TeamApt. With the licence, merchants on the Kippa platform may operate as agents and offer financial services like as cash withdrawals and deposits, bank account opening, bill and utility payments, and insurance to regular clients who frequent their small businesses.
“We have over 500,000 merchants on our app and there’s a lot of opportunities for us to do more for them and provide more financial services,” said Ekezie-Joseph. “The super agent licence allows merchants and typical neighbourhood shops who already use our bookkeeping app into a one-stop-shop for essential financial services for their customers.”
A Look At What The Startup Does
Ekezie, together with Duke Ekezie and Jephthah Uche, established Kippa in February 2021. Before launching Kippa, the three of them launched Africave, a website that connected employers with software developers.
Kippa is an accounting platform for SMEs in sub-Saharan Africa. Pastel, Bamba, OZE, and Bumpa are just few of the similar service providers operating in the sub-Saharan area.
With Kippa, entrepreneurs can record their daily financial activities, generate invoices and receipts, handle inventory, and analyse the growth or decline of their enterprises over time.
Kippa has merchants in all 774 of Nigeria’s local governments.
Due to the high expenses and complicated nature of registering a business, the vast majority of Nigeria’s small enterprises are not recognised by the government. According to Ekezie-Joseph, one of the quickest incorporation tools for small firms was released by First, Kippa a few months ago.
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“We’ve built a product on top of the current Kippa product that allows businesses to register in 3 days for N15,000,” said Ekezie-Kennedy describing the option provided by his platform to aid in the formal organisation of these firms. Kippa’s aspirations to stack financial products, which include gaining massive momentum and increasing revenue, are predicated on this capability, the company’s CEO said.
For a startup to achieve such rapid growth, it is essential to get the services of capable individuals who can steer the company’s blitzscaling efforts. The finance management platform has, to that end, hired away former regulators and top executives from companies including OPay, BharatPe, Khatabook, TeamApt, OKCredit, NIBSS, and Unified Payments. Toyin Albert will be taking on the role of executive director of payments services, Osagie Alonge will be leading marketing efforts, and Niyi Ajao, formerly the deputy managing director of the Nigeria Inter-Bank Settlement System (NIBSS), will lead as chairman.
In its first year of business, Kippa has successfully raised over $11 million. Investors have been convinced by the firm and its rivals that the market they service is big enough for all of them to survive. That assertion is supported by data showing that over 49.3 million people in the country own and operate small and medium-sized enterprises (SMEs). Credit, however, is the glue that holds everything together as these platforms market distinct methods to organisations, such as bookkeeping, supplier connection, banking, and software services. Although the CEO expected last year that Kippa’s credit and lending arm would be a revenue generator for the company, it has been placed on hold for the time being; hopefully, this won’t delay the startup too much in its goal of being the go-to financial service provider for small companies.
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“Credit remains an insanely huge opportunity for us. And while we have a lending licence in Lagos and Abuja, we’re spending our time building out the arms of the business that provide and continue to expand transactional data that we have on businesses. This allows us to build a healthier loan book when we start lending,” he said.
Kippa Finance
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexpert