Nigerian startup, Pastel, has announced a seed raise of $5.5 million led by pan-African venture capital firm TLcom Capital.
This is coming after the company, formerly called Sabi Cash, raised a $620,000 pre-seed last year from some of its existing investors.
According to TechCrunch, Global Founders Capital, Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play, and Soma Cap also participated in the seed round.
Pastel was founded by Afghanistan national, Abuzar Royesh, and his Nigerian co-founders, Olamide Oladeji and Izunna Okonkwo, who shared similar interests in building solutions for micro and SMBs in emerging markets, particularly from their countries of origin.
The company’s flagship product, Sabi Cash, is a digital bookkeeping app that allows small businesses to monitor and manage their transactions and customers, get insights into their cashflows, issue receipts, and effectively manage customers who owe them.
On the seed raise, Patel co-founder, Okonkwo said: “As a team, we are taking a product-led growth approach where we iterate after doing massive amounts of research into how users are using the solutions and what they are asking for. The new capital will assist us in increasing our efforts in this area as we look to expand our product offerings and develop more productivity and finance management features and tools around group savings, loans and payments for small businesses.”
On the company’s product, Okonkwo said: “Our thought process was as soon as we got traction, the next step was to capture some value. So we added features to the Sabi app and what we’re building now is a little bit more.”
“The way we’ve thought about it is, as opposed to creating a super app that a lot of other fintechs have or are in pursuit of, we are taking a more platform approach, meaning that any Pastel user can sign up with any of our apps with the same login and access all of the other solutions that we’re providing,” he added.
The U.S.-headquartered and Lagos-based Pastel isn’t the only startup operating in this line of business. In the last 24 months, several startups across West Africa, including Kippa, Bumpa (which recently launched a social commerce integration with Meta), OZÉ, and Bamba, have ventured to serve small and medium businesses with bookkeeping tools and credit. While they offer almost identical features such as handling bookkeeping, managing inventory and tracking sales, Okonkwo argues that Pastel’s product-centric approach distinguishes the company from others.
“As a team, we are taking a product-led growth approach where we iterate after doing massive amounts of research into how users are using the solutions and what they are asking for,” said the co-founder. The new capital will assist Pastel in increasing its efforts in this area as it looks to expand its product offerings and develop more productivity and finance management features and tools around group savings, loans and payments for small businesses.
