Nigeria’s Pastel, formerly Sabi Cash, has raised $5.5M in a SEED round led by TLcom Capital with participation from Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play, and SOMA Capital. Founded by Abuzar Royesh, Olamide Oladeji, and Izunna Okonkwo, Pastel is on a mission to build digital tools to unlock the potential of small businesses in Nigeria and other developing countries across the world.
Digital innovations in the tech ecosystem have been capturing investor interest throughout the year. Funds are being directed at startups operating in sectors like IT Solutions, Enterprise Software, and Energy, as seen in our FREE State of Startup Funding – H1 2022 Emerging Venture Markets Report. There has been increasing VC interest in next-gen innovations aimed at AI technologies. Nigeria has been an attractive market for investors to direct capital, especially in the SaaS space, as seen in our Nigeria H1 2022 Venture Investment Report. Consequently, startups like Seamless HR ($10M Series A), ThankUCash ($5.3M SEED), and now Pastel have raised sizable funds to bring technological innovations to Nigeria.
Pastel launched its flagship product Sabi last year to allow SMEs to monitor their transactions, manage their customers, and get insights into their cashflows then issue receipts or invoices. Pastel also has Quick Receipt and Pastel Financing. Izunna Okonkwo, the co-founder of Pastel, told TechCrunch, “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 startup has another product called Swift Money which empowers members of local saving groups called ajo to get financing for their businesses by allowing them to contribute money in varying intervals to a leader who stores the cash on their behalf. They can have different purposes for engaging in this activity, such as saving toward a particular goal or accessing a large pool of credit. “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 create an account with any of our apps. With the same login they can access all the other solutions that we’re providing,” Okonkwo added.
The new capital will assist Pastel in building tools that allow micro, small, and medium businesses to increase sales, process payments, access financial solutions, and immerse themselves in the digital economy. The co-founder concluded, “Our thought process was to get traction quickly by solving a merchant’s pain point with a free and easy solution. The next step was to capture value. Now we are building a lot more.”