Pastel’s founders; Abuzar Royesh, Olamide Oladeji, and Izunna Okonkwo
Nigeria’s Pastel, formerly known as Sabi Cash, has secured a seed investment of $5.5 million in a round led by pan-African venture capital firm TLcom Capital. The seed funding round also received participation from investors like Global Founders Capital (GFC), Golden Palm Investments, DFS Labs, Ulu Ventures, Plug and Play, and Soma Cap. The seed funding round follows a pre-seed funding round of $260,000 last year.
The company plans to use the latest investment to expand its product offerings as well as to develop new features for merchants and businesses.
Pastel was founded by Stanford graduate students Abuzar Royesh, Olamide Oladeji and Izunna Okonkwo, who shared similar interests in wanting to provide solutions for micro, small and medium-scale businesses in emerging markets, especially in their countries of origin – Afghanistan, and Nigeria. The company has been under the radar for a while before announcing its seed funding.
Pastel’s flagship product called Sabi (and completely different from a B2B e-commerce platform going under the same name) is a digital bookkeeping app that gives small businesses the prerogative and power to monitor and manage their transactions, as well as their customers, monitors their cashflow, provides customers with receipts, and control debt. In other words, Pastel helps SMBs to avoid and/or control the challenges associated with operating businesses in emerging markets; its bookkeeping solution helps businesses take their operations digital and reduce costs.
Launched last year, Pastel recorded more than 100,000 merchant registrations as of December 2021, Chief Growth Officer Izunna Okonkwo said. The platform which was offered for no fee to these merchants currently has over 45,000 active merchant users.
The platform has seen new features added for merchants, but unlike other platforms that combine all the features they’re offering into one app, Pastel is offering these products – Quick Receipt and Pastel Financing – as standalones. “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,” Pastel’s Chief Growth Officer explained.
As the name suggests, the Quick Receipt app provides merchants and businesses with simple invoicing and receipt tools, and currently, there are more than 60,000 merchants using it. Its SwiftMoney app leverages local saving groups called Ajo in Nigeria to provide financing for businesses and was built through Pastel Financing. Pastel which only started recently making revenue does so by charging interests and a small fee on loans it provides.
While the startup has quite a number of rivals such as Bumpa, Bamba, Kippa, OZE, etc., its Chief Growth Officer highlights Pastel’s product-centric approach as its selling point. “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,” he said.