Introduction
Nigerian fintech startup Brass has been acquired by an investment group led by Paystack. The consortium includes PiggyVest, Ventures Platform, P1 Ventures, and angel investors Oo Nwoye and Olumide Soyombo. The financial terms of the deal remain undisclosed, but the acquisition marks a significant consolidation in the Nigerian fintech industry.
Leadership Transition
Brass co-founders Sola Akindolu (CEO) and Emmanuel Okeke (CTO), along with head of product Tolulope Saba, will exit the company. Their departure comes amidst ongoing liquidity concerns that have plagued Brass since October 2023. The new leadership team has not yet been announced.
Liquidity Concerns and Industry Reactions
In October 2023, Brass began experiencing delays in processing customer withdrawals, raising liquidity concerns and rumors of a potential shutdown. The fintech community rallied around Brass, fearing that its collapse could trigger a broader bank run on other fintech companies. Speculation about an acquisition by larger fintech firms, including Moniepoint, Paystack, and Flutterwave, soon followed.
Efforts to Secure Financing
During acquisition talks, Brass sought debt financing to maintain operations. One early investor, who chose not to participate in the bridge round, reported that Brass aimed to raise between $300,000 and $500,000 in convertible debt. However, Brass allegedly withheld financial information from investors during this fundraising effort, leaving it unclear how much was ultimately raised.
Uncertainty Surrounding Brass's Balance Sheet
The new owners will inherit both the assets and liabilities of Brass, which include unresolved financial issues. Sources familiar with the company's finances revealed a ₦2 billion gap in Brass's balance sheet. The company's leadership has been unable to account for the missing funds. Investors acknowledged the challenges Brass faced, citing the difficult business environment. They remain optimistic about the company's future under new ownership. "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," they stated.
The acquisition of Brass by a Paystack-led consortium signifies a critical juncture for the Nigerian fintech startup. With new leadership and fresh capital, Brass aims to overcome its financial challenges and continue to provide essential financial operations solutions to businesses across Africa.
