Paystack-Led Consortium Takes Over Brass In Buyout After Controversy

By  |  May 28, 2024

A consortium led by Nigerian fintech darling Paystack has completed the acquisition of Brass, a business banking startup catering to small and medium-sized enterprises (SMEs), in what looks a significant move within Nigeria’s vibrant fintech landscape. This development marks a pivotal moment in Brass’s journey, which both successes and challenges have punctuated.

Founded four years ago by Sola Akindolu and Emmanuel Okeke, Brass initially garnered praise for its commitment to providing essential financial tools to small and medium-sized enterprises (SMEs). Despite its noble aspirations, Brass encountered hurdles along the way, including funding constraints and withdrawal delays, which drew criticism and concern from its user base and industry observers.

Akindolu candidly acknowledged the financial strains faced by startups like Brass, telling TechCabal in March, “The funding winter and the economic situation in Nigeria affect the abilities of companies of our kind to support many customers after some time.”

These challenges hinted at the complexities of operating a fintech startup in a promising but bruising market climate. Nevertheless, it would appear the storm has passed and Brass is getting a new lease on life.

The acquisition by Paystack and its consortium partners, including Piggytech, Ventures Platform, and P1 Ventures, represents a new chapter for Brass. As Akindolu noted, “Following the acquisition, Brass will continue to build and support its customers and grow with a new leadership team.”

During Brass’ harder days over the past several months, customer complaints highlighted the severity of the situation. Many users reported being unable to access their funds for extended periods, leading to disruptions in business operations and personal finances. Despite assurances from Akindolu and attempts to resolve complaints, Brass’s reputation took a hit, with social media platforms becoming outlets for frustrated users to voice their concerns.

However, amid these trials, Brass remained resilient, seeking solutions to its liquidity issues and exploring avenues for growth, though the startup would face several setbacks on this front. Discussions with potential partners, including Flutterwave and Moniepoint, did not materialize into viable solutions. Employee furloughs in March signalled internal restructuring amid financial strain.

But a glimmer of hope did emerge eventually when Brass, which had raised USD 2.1 M in 2021, received a capital injection in the middle of March from a group of investors, providing much-needed working capital to address its challenges.

The acquisition by Paystack and consortium members brings changes to Brass’s leadership. Akindolu and the founding team will step aside, signalling a transition in management. As Brass transitions into this new phase of its journey, stakeholders keenly anticipate moves that will shape its future trajectory.

While bidding farewell to familiar faces, Akindolu expresses optimism for the future under new leadership.”The work of making entrepreneurship permission-less is far from finished, and we definitely look forward to what’s next from the new team,” he says.

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