Uzoma Dozie, CEO, Sparkle |
Sparkle, founded by an ex-CEO of
a former Nigerian incumbent bank, is one such fintech, and it has closed a seed
round of $3.1 million to scale operations.
Nigerians have a love-hate
relationship with traditional banks. Even though the number of active bank
accounts in the country is above 100 million (from a population of about 200
million), problems around inefficient service delivery, serial downtimes, and
bad loans and experiences have made many people distrust banking services.
Neobanks sensed an opportunity
and are vying for the attention of these banked but unsatisfied customers. Sparkle,
like any neobank in the market, is counting on standard features such savings,
bill payments, top-ups, requesting or sending funds, as well as less common
features — like bill splitting and reviewing spending breakdowns — to attract
customers in a crowded market.
“We’re quite different in a way
because instead of separating financial services from lifestyle, we’ve tried to
bring them together, especially as we’ve seen that more people are beginning to
lead more digitally-led lives,” CEO Uzoma Dozie said to newsmen in an
interview.
“It means that we don’t see our
customers from accounts, payments, deposits or credit perspectives, but from
how can we help them do what they want to do at any particular time.” So that’s
Sparkle’s pitch — 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 claims the new business arm has caught on well with
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 an email address — the
lowest form of documentation in the market for businesses.
Sparkle’s mix of providing
banking services to individuals and businesses on a single platform is unique.
Other neobanks in the country — such as Kuda, VBank, FairMoney and Carbon — are
known to offer tailored services to individuals. At the same time, platforms
including Brass and Prospa cater to varying sizes of businesses.
“As a small business, I’m not
carrying my bank account on my mobile. I’m carrying my business. So we are
bringing everything about your business into one place so that you can do
business wherever you are,” Dozie said.
“For individuals, we’re bringing
everything into one place so that you can do what you want to do quite easily
wherever you are. But the bottom line is that we’re providing you with the information
that you need to take spontaneous decisions.”
Dozie highlights some features of
Sparkle that customers might hardly get with other platforms. For instance,
customers can check the transaction history with a particular beneficiary
without browsing through a financial statement, confirm the location where they
made each transaction, and schedule payments.
“Sparkle’s design is also
tailored to how most Nigerians operate their lives offline. Customers can have
multiple accounts (personal and business) and switch whenever they want to on
Sparkle. They can use the platform on various phones with the same enhanced
security as other platforms that allow login on a single phone,” Dozie said.
Since launching last year, the
neobank has acquired over 40,000 customers on the individual banking side and
2,000 businesses. The company began charging individual customers small fees to
keep their accounts running and plans to charge businesses for most features
except taxation services, said Dozie.
Similar to most digital banks in
the country, Sparkle has a microfinance bank license. It has also secured a
partnership 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 knowledgeable on how the
Nigerian fintech space works knows it can take some time to secure licenses and
partnerships. Sparkle has been able to do so in under a year due to its CEO’s
vast experience and connections.
Before Sparkle, Dozie was the CEO
and last group managing director of Diamond Bank. He oversaw the bank’s
corporate, commercial and retail arms before its merger with Access Bank; the
business is now 29 million customers strong.
With Sparkle, Dozie is keen on
expanding the capabilities of Nigeria’s banking and retail sectors, continuing
from where he left off at Diamond Bank. As an investor himself, he enlisted an
all-Nigerian cast for his seed round — lead investor Leadway Assurance,
participant Trium Network and a few unnamed high-net-worth individuals. The
investment comes after Sparkle closed a friends and family pre-seed round of $2
million within the past year.
He opined that while he could
have raised money from foreign investors, he chose to go with this group of
investors because they provide the experience and market that Sparkle needs to
scale in Nigeria. He was also keen on getting high-net-worth individuals to
invest in a tech company.
“Collectively, as a group of
investors and business builders, we are Nigerians who are bullish about Nigeria
and the opportunity the country presents in terms of building global networks
and communities, all via one app,” the CEO said in a statement.
The CEO told newsmen that Sparkle
will use the investment for two purposes: building robotic process automation
to help with mundane and repetitive processes, then hiring talent across
engineering, finance risk and marketing.
Credit: TechCrunch
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