Nigeria’s Kippah Secures $ 3.2 Million In Pre-Seed For Its Small Business Financial Management App – TechCrunch


Millions of small businesses around the world, especially in emerging markets, have gone offline for most of the past decade. For this reason, most of them still rely on scribbles using pen and paper or ledgers for accounting and storing important information.

In Nigeria, some go so far as to take information lightly. All of these inefficiencies, aside from being time consuming, lead to errors and affect cash flow and finances, which is why nearly nine out of ten small businesses in the country go bankrupt in the first five years..

Nigerian startup Kippa, which attempts to improve the lifecycle of these small businesses with its financial management app, has raised $ 3.2 million in pre-seed funding.

The startup’s new round table was led by VC based in Berlin Global target. Entrance Capital, Alter Global and Rally Cap Ventures are the other participating VCs.

A number of angel investors – Babs Ogundeyi, CEO of Kuda; Sriram Krishnan, an investor in Khatabook; Raffael Johnen, CEO of Auxmoney; Chris Bouwer; Kyane Kassiri; Edward Suh of Goodwater Capital; and Sajid Rahman – invested in the startup.

Kippa works as a simple app where small business owners can track their daily income and expense transactions, create invoices and receipts, manage inventory and generally to watch how their activities fluctuate over time.

One of the most important features of the app, according to the company, is that it helps merchants track debtors and send them automated reminders.. The company claims that traders who use Kippah in this way “get their debts 3 times faster.”

Most of these features are aimed at integrating a wide range of businesses in Nigeria on the platform; however, the strategy is to introduce them to credit and other financial services.

There is a cultural nuance to this, co-founder and CEO Kennedy ekezie says TechCrunch. The majority of transactions made by small businesses are made in cash and over 30% of sales are made on credit. So, basically, the biggest problem businesses face is not a lack of accounting or tools, but a lack of working capital or credit.

“For us, what we do is we have a unique opportunity to provide financial services to users. For most of them, Kippa is the first B2B SaaS application they use, ”said the CEO, who started the company with Duke Ekezie and Jephthah Uche.

“And we have a unique opportunity to help them accept digital payments online, provide them with working capital, digital savings and connect them to the financial ecosystem. “

Many startups catering to the diverse needs of small businesses and startups launched with bold promises last year – all with different approaches; some want to handle accounting, some want to connect small businesses with suppliers, others provide banking and software services.

But in reality, they all converge on the same point, that of access to credit. CEO Ekezie says that while this is true, Kippa “chooses to be numerically native, rather than continuing to digitize analog processes that previous players have done. “And that sets the company apart, according to the founder.

As Kippah remains free for businesses today, the introduction of credit and other financial services will allow the business to generate income by charging commissions or interest on loans or working capital..

The accounting and finance app claims it has grown an average of 126% month-over-month since its launch in June. With oto 130,000 active businesses, ranging from small kiosks and shops around the corner to local food vendors and high-end merchants using the app, Kippah claims to have saved over $ 300 million in the past five months.

For the lead investor Target Global, these measures indicate a strong need for the product in the Nigerian market; therefore, that is why he invested. According to Lina chong, Chief Investment Officer of the company, “Our investment in Kippa will allow it to grow and be the premier financial management solution for small businesses in Africa. “

Ekezie and its co-founders launched Kippa in February 2021. Before Kippa, the trio founded Africave, a software talent search platform in 2019 which closed last year.

According to Ekezie, they left Africave after recognizing impending supply constraints that would put a cap on the growth of the company..

The CEO said the founders were looking to solve another problem that they believed was perfect for their strengths. After embarking on a foundational and market-tailored tour and meeting with several small business owners across Nigeria to understand their weak points, Kippa was born..

“What we saw is that a lot of them were working very manually using ledgers, spending an hour or more at the end of the day balancing their books, making mistakes, canceling, complaining about their incomplete records, ”Ekezie said.

“And we saw a bigger problem – which is the biggest problem small businesses face – lack of access to credit or finance to operate. correctly. So we thought it was a pretty interesting problem to solve.

The team also spoke with the founders and some of the founding team members of similar players in other emerging markets such as Khatabook in India, Treinta in Colombia, BukuWarung and Bukukas in Indonesia to understand how they did. evolve their business..

And while there are some similarities, Ekezie believes he and his team have rewired Kippah to fit the needs of businesses in Nigeria. For example, as Khatabook and others digitize accounting processes before anything else, Kippa addresses issues of broader access to finance..

The Kippah preselection round, one of the most important in Nigeria and sub-Saharan Africa, to be invested by developing its merchant base, improving its product, developing the team and venturing into financial services.


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