German VC Firm Makes A Rare African Entry, Leads $3.8m Pre-Seed In Nigerian Small Business Manager, Prospa
Berlin-based venture capital firm, Global Founders Capital (aka European Founders Fund), has invested heavily in the United States — over 111 investments — and in global tech giants such as LinkedIn, Facebook, Slack, Eventbrite, among others, apart from Africa. But that appears to no longer be the case. The VC firm which has participated in deals worth more than €1.5b in the last 12 months, has led a $3.8m pre-seed round in Prospa, a Nigerian fintech startup that combines banking and business management tools for micro and small businesses.
The VC says it backs founders who start category defining ventures.
Also joining the investor in Prospa’s latest deal is Liquid 2 Ventures which recently participated in Chipper Cash’s $13.8m seed round. Immad Akhund of Mercury, Karim Atiyeh of Ramp, and executives from Teachable, Square, Facebook, and Nubank were among the participants in Prospa’s latest round.
Prospa intends to use its fresh funds to double focus on acquisition methods in order to get additional clients. In addition, the company intends to expand its workforce, particularly in product and engineering.
A Look At What The Startup Does
Frederik Obasi, Chioma Ugo, and Rodney Jackson-Cole formed Prospa in 2019 to offer invoicing tools, inventory management, employee and vendor administration, an e-commerce site, and payroll functions in addition to banking services to small businesses.
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Businesses that register on the site gain access to an account number as well as other Prospa services.
Prospa guides unregistered firms through the process of formalizing their operations and setting up bank accounts. This portion, though, is more of an inroad into an upsell in the grand scheme of things.
Mr Obasi stated that the company has tens of thousands of enterprises and is growing at a rate of 35% month over month.
Prospa has also managed over 150,000 product catalogues outside of banking, with small businesses sending out 360,000 invoices through the platform.
The company was one of ten African startups selected for Y Combinator’s winter batch in March of this year.
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People like Obasi had to hunt for software or employees to handle the operational aspects of their firms because banks were only concerned with delivering specific financial services.
Prospa business Prospa business
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