Afrigather Two months after it raised bridge financing to resolve challenges with working capital, the Nigerian enterprise banking startup Brass has been acquired by a consortium of buyers led by fee large Paystack, culminating talks that seemingly started in early 2024. Different buyers embody PiggyVest, Ventures Platform, and P1 Ventures.
VC agency, Ventures Platform, facilitated the conversations and believed the deal needed to occur, mentioned one individual conversant in the discussions. Ventures Platform additionally understood the necessity for knowledgeable operators to even be concerned. That pragmatism drove the strategic alliance between the VC companies and the startups within the consortium.
“We’re excited to behave as new stewards for Brass’ mission: to allow entrepreneurship for Africans, making it extra frictionless, and profitable,” the buyers instructed TechCabal in an e-mail.
Cofounder and CEO, Sola Akindolu and Emmanuel Okeke, cofounder and CTO will depart the enterprise. Tolulope Saba, the top of Product may also depart. They are going to be changed by a brand new management workforce that has not but been disclosed. All different Brass staff will maintain their jobs, one individual with direct data of the matter mentioned.
There can be no change for purchasers both, with the product remaining largely the identical and buyers committing to “additional funding in product and repair enhancements.”
The acquisition ends months of uncertainty over the way forward for Brass after delays in processing buyer withdrawals started in October 2023. These delays continued for months, sparking liquidity issues and prompting rumours of a shutdown.
A number of ecosystem heavyweights rallied across the firm, frightened that the shuttering of a deposit-taking fintech may trigger a bank run on different fintechs. An acquisition by well-trusted and larger fintechs would calm these fears, so chatter about an acquisition began gathering steam. Moniepoint, Paystack, and Flutterwave have been linked to these early talks.
As acquisition talks continued, Brass went to buyers to rearrange debt financing to permit it stay operational. One early investor who declined to take part within the bridge spherical claimed Brass was seeking to increase $300,000 to $500,000 in convertible debt. The identical investor mentioned the enterprise banking startup withheld monetary data from buyers throughout that fundraising effort. It’s unclear how a lot Brass finally raised.
However, the brand new homeowners will assume Brass’s property and liabilities, a few of which nonetheless have vital query marks.
Two individuals conversant in the corporate’s funds declare there was a ₦2 billion gap in Brass’s steadiness sheet. The identical individuals mentioned the corporate’s management couldn’t account for a way the cash was spent.
“Like many companies, Brass confronted headwinds inside the previous few months given the tough enterprise setting,” the buyers mentioned in response to questions on these liabilities.
“With a wholesome funding of latest capital, Brass is in an unbelievable place to ship a world-class monetary operations stack for companies in Africa.”
