Nigerian digital bookkeeping startup, Pastel, has completed its seed funding round, raising $5.5 million from a series of investors.
The seed funding round was led by TLcom Capital, while further participations came from VCs like Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play Ventures, and Soma Capital.
With the new financing, Pastel said it would increase its product offerings, and develop more productivity and finance management features and tools around group savings, loans and payments for small and emerging businesses.
The startup provides bookkeeping solutions to businesses in the small and medium scale division, through its Quick Receipt, and Pastel Financing products. Prior to creating Quick Receipt and Pastel Financing, the startup ran Sabi, which is a digital bookkeeping app that empowers small businesses to monitor and manage their customers and transactions. The app also help businesses gain insights into their cash flows, issue receipts, and also manage customers owing them.
“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,” co-founder, and chief growth officer (CGO) Izunna Okonkwo, said.
While other companies like Kippa and Bamba run operations similar to Pastel’s, Okonkwo noted that Pastel, which is headquartered in the US, but operates from Nigeria, has a different operational approach.
“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,” Okonkwo said.
Currently, Pastel has a suit of product: the Swift Money app provides business financing through a traditional contributory financing model called ajo. The Quick Receipt app provides invoicing and receipt solutions to about 60,000 users, out of which 45,000 are active.
The company recently started raising revenue by charging a fee, and interest on the loans it provides. The company also has access to ajo group, and uses it as a float for loan financing. Pastel plans to raise debt financing in the coming year.