Kippa, a Nigerian startup that uses its finance management app to try to enhance the life cycle of small enterprises, has secured $3.2mn in pre-seed investment.
Target Global, a Berlin-based venture capital firm, led the startup’s fresh funding round. The other VCs who took part are Entrée Capital, Alter Global, and Rally Cap Ventures. Babs Ogundeyi, Kuda CEO; Sriram Krishnan, a Khatabook investor; Raffael Johnen, Auxmoney CEO; Chris Bouwer; Kyane Kassiri; Edward Suh of Goodwater Capital; and Sajid Rahman were among the angel investors that invested in the firm.
“What we saw was a lot of them (small businesses) operating very manually using the ledgers, spending one hour or more at the end of the day balancing their books, making mistakes, canceling out, complaining of their records being incomplete,” said co-founder and CEO Kennedy Ekezie.
“And we saw a bigger problem — which is the biggest problem small businesses face — the lack of access to credit or financing to run properly. So, we thought that was an interesting enough problem to solve.”
Kippa’s pre-seed round, which is one of the largest in Nigeria and Sub-Saharan Africa, will be used to expand the company’s merchant network, improve its product, scale the team, and enter the financial services market.
The startup’s traction has been critical in securing this current round of funding; the bookkeeping and finance software claims to have grown at a monthly rate of 126 percent since debuting in June. Kippa claims to have logged over $300 million in sales in the last five months, with over 130,000 active companies ranging from small kiosks and street corner shops to local food vendors and high-end retailers utilizing the app.
These data imply a strong demand for the product in the Nigerian market, according to principal investor Target Global, which is why it invested.
“Our investment in Kippa will enable it to grow and be the first-choice financial management solution for small businesses in Africa,” said Lina Chong, the firm’s investment director.
What You Need To Know About Kippa
Kippa was founded in February 2021 by Ekezie and his co-founders Duke Ekezie and Jephthah Uche. Prior to Kippa, the three co-founded Africave, a software talent matchmaking website that closed down last year.
Kippa is a simple tool that allows small business owners to keep track of their daily income and spending transactions, make invoices and receipts, manage inventory, and see how their businesses fluctuate over time.
According to the business, one of the most essential aspects of the software is that it assists merchants in keeping track of debtors and sending automated reminders to them. Merchants who utilize Kippa in this fashion, according to the business, “recover debts 3x faster.”
Kippa differs from other existing solutions, according to CEO Ekezie, because the company is “choosing to be digitally native, rather than pursuing the digitization of analog processes as past players have done.” According to the founder, this distinguishes the company.
Kippa is now free to use for businesses, but with the addition of credit and other financial services, the company will be able to generate money by charging commission fees or interest on lending or working capital.
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