NIGERIA – Kippa, a startup that has financial software for small businesses in Africa, has secured US$3.2 million in pre-see funding in a bid to improve the lifespan of small businesses in Nigeria with its finance management app.
The financing round was led by Berlin-based VC Target Global, and other participating VCs like Entrée Capital, Alter Global and Rally Cap Ventures.
The startup has also seen investors like — Babs Ogundeyi, Kuda CEO, an investor in Khatabook; Sriram Krishnan, CEO; Chris Bouwer, Raffael Johnen, Auxmoney; and other investors like, Kyane Kassiri, Sajid Rahman and Edward Suh of Goodwater Capital.
With Kippa, small business owners see their daily income and expense transactions, create invoices and receipts, manage inventory and generally keep track of the ebb and flow of their businesses.
According to the company, one very important feature of the app is helping merchants keep track of debtors and sending automated reminders to them. Businesses who use Kippa this way recover debts 3x faster, the company claims.
Majority of small businesses carry out transactions using cash, and over 30% of sales happen on credit. So, the biggest challenge businesses face is not the absence of bookkeeping or tools, but the deficiency of working capital or credit, co-founder and CEO Kennedy Ekezie.
“We see what we do as a unique opportunity to provide financial services to users. For most of them, Kippa is the first small business finance management app they’re using,” CEO, and co-founders, EkezieDuke Ekezie and Jephthah Uche said.
Discovering an imminent supply constraint that would slow down company’s growth, Ekezie and his co-founders moved from Africave, a software management platform, and decided to start Kippa in February 2017.
They embarked on a founder market tour and discovered that many small businesses were operating manually with ledgers and spending a lot of time trying to balance their account book due to recurring errors.
“We sought to solve the biggest problem small businesses face which is the lack of access to finance to run properly. We thought that was an interesting problem to solve,” they said.
Kippa’s pre-seed round will be invested in growing its merchant base, improving its product, scaling the team, and also venturing into financial services. It is unarguably one of the largest pre-seed round in Nigeria and sub-Saharan Africa.
For the better part of the last decade, many small businesses globally, have stayed offline due to the fact that most of them still rely on crude forms of bookkeeping snd information management.
In Nigeria, nine out of ten businesses fold up due to their inefficient documentation. Some of these businesses go as low as keeping information offhand which obviously leads to errors and time wastage.
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