Pastel, Nigerian accounting and merchant digital platform, raises $5.5M led by Telkom – TechCrunch

Startup Stories


Digitizing the operations of small and medium-sized businesses (SMBs) in sub-Saharan Africa in the traditional retail sector has no end in sight. In Nigeria alone, this industry is worth more than $200 billion and is comprised of over 40 million businesses of various sizes, according to reports.

Traditional retail in the country includes small kiosks and open-air markets that sell a variety of products from food and beverages and groceries to personal care products and stationery. B2B digital marketplaces such as TradeDepot, Sabi and Omnibiz have raised millions of dollars for thousands of businesses to buy from manufacturers as they provide solutions to track cash flow, payments and access capital. Meanwhile, another group of startups offers software and apps to help these retailers with their accounting and sales tracking processes and other features.

Pastel, a second-tier startup that has been on the radar for more than a year, is announcing a $5.5 million seed round led by pan-African venture capital firm Telkom Capital. Other VC firms like Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play and Soma Cap participated in the seed round. The startup raised $620,000 in pre-seed from some existing investors last year.

Formerly Sabi Cash, Pastel was founded by Abuzar Royesh, Olamide Oladji and Izuna Okonkwo, Stanford graduate students who, as co-founder and chief development officer (CGO), Okonkwo shared a similar interest in building solutions for microcosms in an interview with TechCrunch. and SMBs in emerging markets, especially from their home countries: Afghanistan (Roysch) and Nigeria (Oladji and Okonkwo).

The company’s flagship product (not to be confused with the B2B e-commerce marketplace of the same name) is a digital accounting application that allows small businesses to monitor and manage their transactions and customers, access cash flow information, and issue invoices. , and effectively manage owed customers.

Small businesses in Nigeria have been offline for years, storing information and important information out of hand, on paper or letters. All of these weaknesses lead to errors that are time-consuming and affect cash flow and financing, which is why nine out of 10 small businesses in the country fail in the first five years. Registry solutions like Pastel can help these businesses streamline processes digitally and save money.

L-R: Izunna Okonkwo (CGO), Olamide Oladeji (CPO) and Abuzar Royesh (CEO). Image Credits: Pastel

Pastel Accounting and Customer Relationship Management, launched last year, recorded over 100,000 merchant registrations by December 2021, Okonkwo said. The free app currently has over 45,000 active merchant users. Pastel has recently added more features for merchants to capture more value in this chain. However, unlike other platforms that bundle multiple features into one app, Pastel chose a different strategy and made each product stand-alone: ​​Instant Invoice and Pastel Financing.

“It was our thought process To quickly absorb in SolviA merchant’s pain point with Free and easy solution. THe The next step was capture Price. in order to We added. Price is takene Features to They said. App Our customers love it. We are building many more now.” Okonkwo spoke about the company’s decision to build three independent platforms instead of combining them all into one app. “The way we thought about it, it’s as opposed to creating too many other apps. fintech What we have, or are looking for, is that we’re taking a more cross-platform approach, meaning that any Pastel user can. Create an account with any of our applications. WSame entry You can Access all of them Other Solutions We Offer”

The Instant Invoice app provides businesses with easy invoicing and invoicing and over 60,000 active merchant users. On the other hand, Swift Money, a local savings group in Nigeria called Ajo, used to finance businesses has been secretly built for the past three months by Pastel Financing.

Ajo or Issu is a popular financial scheme in Nigeria where a group of people contribute money at various times to a leader who accumulates the money on their behalf. They may have different motives for engaging in this activity, such as saving for a specific goal or obtaining a large loan portfolio.

Swift money The app is designed for Working with already established Ajo leaders and their groups. Pastel does not aim to replace these leaders, but rather to provide them.To better monitor the welfare of their teams and provide financial support to team members. non In addition to participating in the formalities of cash collection and cash deposit, a [Pastel] Bank account to save, The leader comes down The app to set up profiles for members. WAny members (in this case, they are businessmen) who want to get a loan, the leader asks on the applicationthe member will be evaluated Based on their rescue history And if the credit is due, Business loan paid off For them.

The leader Then he is responsible for remembering these loans to one passTel account is similar to The way they always did their savings.

Pastel has only recently started monetizing and doing so by charging interest and small fees on these loans. It also has access to savings that can be used to float loan financing. To complete this process, the one-year-old company plans to raise debt capital in January, Okonkwo said. “We have not incurred any debt. Now that we have not passed our loan product.He said.

US-headquartered and Lagos-based Pastel is not the only startup operating in this line of business. In the last 24 months, several startups in West Africa, incl Kippa, Swelling (Recently kick off integration of social commerce with Meta), Brave And Bamba, dare to serve small and medium businesses with accounting tools and loans. While they offer similar features such as accounting, inventory management and sales tracking, Okonkwo argues that Pastel’s product-centric approach sets the company apart.

“At the team level, we are taking a product-driven development approach after conducting extensive research into how users use our solutions and what they require,” said the co-founder. The new capital will help Pastel expand its product offerings and enhance its efforts in this area as it looks to develop more productivity and financial management features and tools for group savings, loans and payments for small businesses.


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