The wave of neobanks is starting to take shape in Africa, particularly in Nigeria, where new fintechs are trying to tackle old banks by offering cheaper and more personalized banking services..
Sparkle, founded by a former CEO of a former Nigerian bank, is one such fintech, and it has closed a $ 3.1 million funding round to expand its operations.
Nigerians have a love-hate relationship with traditional banks. Although the number of active bank accounts in the country exceeds 100 million (out of a population of approximately 200 million), problems with inefficient service delivery, serial downtime, bad debts and experiences have made many people wary of banking services.
The neobanks have sensed an opportunity and are competing for the attention of these banked but dissatisfied customers. Sparkle, like any neobank on the market, relies on standard features like savings, bill payments, top-ups, requesting or sending funds, as well as less common features – like bill splitting. and looking at the expense breakdown – to draw customers into a crowded environment. Marlet.
“We’re quite different in a way because instead of separating financial services from lifestyle, we’ve tried to bring them together, especially since we’ve seen more and more people starting to lead a life. more digital, ”said CEO Uzoma Dozie. told TechCrunch in an interview.
“This means we don’t see our customers from an accounts, payments, deposits or credits perspective, but how can we help them do what they want to do at any given time?. “So this is Sparkle’s business case: to provide financial, lifestyle and business support services to Nigerians.
In April, the company launched Sparkle Business to acquire a different set of underserved users: small and medium businesses.. Sparkle says the new branch of business has adapted well to this category, which now has access to inventory and invoice management, tax advice, and payroll and employee management services..
These businesses can access these features with a tax identification number (TIN) and email address – the lowest form of documentation on the market for businesses..
Sparkle’s combination of providing personal and business banking services on a single platform is unique. Other neobanks in the country – such as Kuda, VBank, FairMoney and Carbon – are known offer tailor-made services to individuals. At the same time, platforms such as Brass and Prospa cater to companies of different sizes..
“As a small business, I don’t carry my bank account on my mobile. I carry my things. So we bring everything about your business together in one place so you can do business wherever you are, ”Dozie said. “For individuals, we bring everything together in one place so you can do whatever you want to do. easily wherever you are. But at the end of the day, we give you the information you need to make spontaneous decisions.
Dozie highlights some features of Sparkle that customers could hardly get with other platforms. For example, customers can check the history of transactions with a particular payee without going through a financial statement, confirm the location where they made each transaction, and schedule payments.
Sparkle’s design is also suited to the way most Nigerians go about their lives offline. Customers can have various accounts (personal and professional) and switch to Sparkle whenever they want. They can use the platform on various phones with the same enhanced security as other platforms that allow connection on a single phone, Dozie said.
Since its launch last year, the neobank has acquired more than 40,000 clients from the retail banking sector and 2,000 businesses. The company has started charging a nominal fee to individual customers to keep their accounts running and plans to charge businesses for most features except taxation services, Dozie said..
Similar to most digital banks in the country, Sparkle has a microfinance banking license. It has also partnered with Visa to allow users to make in-person or digital payments with a Visa card. Other partnerships are with companies like Network International and PwC Nigeria.
Anyone familiar with how the Nigerian fintech space works knows that securing licenses and partnerships can take some time. Sparkle was able to do this in less than a year thanks to the vast experience and connections of its CEO.
Prior to Sparkle, Dozie was the CEO and last CEO of the Diamond Bank Group. He supervised the corporate, commercial and retail branches of the bank before its merger with Access Bank; the company now has 29 million customers.
With Sparkle, Dozie aims to expand the capabilities of Nigeria’s banking and retail sectors, continuing where he left off at Diamond Bank. As an investor himself, he recruited an all-Nigerian cast for his round table – lead investor Leadway Assurance, the Trium Network participant and a few anonymous high net worth individuals. The investment comes after Sparkle closed a friends and family $ 2 million pre-seed round over the past year.
He felt that while he could have raised funds from foreign investors, he chose to go with this group of investors because they offer the experience and market that Sparkle needs to grow in Nigeria.. He also wanted to get high net worth individuals to invest in a tech company.
“Collectively, as a group of investors and business creators, we are optimistic Nigerians about Nigeria and the opportunity the country presents in terms of create global networks and communities, all through a single application, ”the CEO said in a statement.
The CEO told TechCrunch that Sparkle will use the investment for two purposes: to create robotic process automation to help mundane and repetitive processes, and then to hire talent in engineering, financial risk, and marketing.