Two months after securing bridge financing to tackle working capital issues, Nigerian business banking startup Brass has been acquired by a group of investors led by payment giant Paystack. The consortium also includes PiggyVest, Ventures Platform, and P1 Ventures. Discussions for this acquisition likely began in early 2024.
Ventures Platform, a venture capital firm, played a key role in facilitating the deal. They believed it was essential and emphasised the need for experienced operators to be involved, which led to the strategic alliance among the VC firms and startups in the consortium.
“We’re excited to act as new stewards for Brass’ mission: to enable entrepreneurship for Africans, making it more frictionless, and successful,” the investors told TechCabal via email.
Brass’s co-founder and CEO, Sola Akindolu, and co-founder and CTO, Emmanuel Okeke, along with head of Product, Tolulope Saba, will leave the company. A new leadership team, yet to be disclosed, will take over. All other employees will remain, and customers will experience no changes, with the product staying largely the same. The investors have committed to further investment in product and service improvements.
The acquisition ends months of uncertainty for Brass, which started in October 2023 when customer withdrawal delays led to liquidity concerns and rumours of a shutdown. Many in the fintech ecosystem were worried that if Brass failed, it could trigger a bank run on other fintechs. Thus, talks of an acquisition began to gain traction, with Moniepoint, Paystack, and Flutterwave mentioned as potential buyers.
During the acquisition talks, Brass sought debt financing to stay operational. An early investor claimed Brass aimed to raise $300,000 to $500,000 in convertible debt but withheld financial details during the fundraising. It’s unclear how much was eventually raised.
The new owners will take on Brass’s assets and liabilities, some of which are still uncertain. Sources familiar with Brass’s finances reported a ₦2 billion deficit in the company’s balance sheet, with the leadership unable to account for the spending.
“Like many businesses, Brass faced headwinds within the last few months given the difficult business environment,” the investors said regarding the liabilities.“With a healthy investment of new capital, Brass is in an incredible position to deliver a world-class financial operations stack for businesses in Africa.”
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