The race has begun to unlock Africa’s growth potential. The World Bank expects the continent’s economy to grow by 3.7% in 2022 and a further 3.8% in 2023, despite global headwinds. And it will be SMEs that will take the lead: consultant McKinsey estimates that SMEs account for 80% of jobs across Africa.

It is therefore essential to allow those companies to grow faster – and show more resilience in more difficult periods. Nigerian start-up Kippa thinks it could be an important piece of the puzzle. Since its launch in June 2021, it has signed up 500,000 SMEs in its home country – and now it has raised funding and has started expanding into other African markets.

Kippa provides a financial management and payment platform, delivered via a mobile app, to give small Businesses access to essential digital tools. “Small businesses in Africa are still doing everything by hand,” explains Kippa CEO Kennedy Ekezie-Joseph. “For the most part, every part of their business is manual and only involves cash.”

The problem with that is twofold. First, manual systems make managing small businesses — from managing money to keeping track of inventory, company records, personnel, and suppliers — very challenging. And the headaches only get worse as the company grows. Second, the lack of any financial management system means that companies do not have electronic records; leaving them without access to financial services such as credit that could support and accelerate their expansion.

Kippa’s platform is therefore a one-stop shop for three different types of digital capabilities. First, it offers an accounting app that allows businesses to digitally manage all their transactions, both payments and receipts, so that they can finally move away from manual systems. The functionality extends from basic accounting to supporting online payments and the launch of digital stores.

In addition, Kippa has been licensed by the Central Bank of Nigeria to operate as a financial services company, providing essential services such as cash withdrawals and deposits, bills and utilities, and insurance; merchants with its app can provide access to these services through their stores, earn additional income and increase visitor numbers.

The third leg of the stool is a tool for company recording. It allows users to formalize their business in just three days, giving them the legal status they need to access banking services and other essential support.

“Small businesses in Africa are hopelessly lagged by traditional providers and while we see some new entrants from other emerging markets, they invariably offer copies of solutions that work in other regions but don’t account for local and cultural differences here,” adds Ekezie- Joseph. “Our mission is to make it easy for everyone to start and run profitable small businesses in Africa.”

The platform’s rapid traction suggests that there is significant demand for such solutions. But Ekezie-Joseph points out that the 500,000 companies that Kippa has on board during the first 16 months in Nigeria are only a small part of the country’s 47 million population of small traders. “We are still a drop in the ocean”, he looks back.

There is also the potential for Kippa to expand across the continent. It launched last month in neighboring Ghana and plans further access to new markets across Africa before the end of the year.

To support those plans, Kippa has now built a sizeable war chest. The company announced last November that it had raised $3.2 million in pre-seed financing and followed that up last month with the successful completion of a round of $8.4 million. The September funding attracted investors including Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, Crestone, VentureSouq, Horizon Partners and Vibe Capital.

The company has also made a number of high profile hires, with a particular emphasis on building regulatory experience. Recruits include Niyi Ajao, a former deputy director of the Nigeria Inter Bank Settlement System, who has joined Kippa as chairman.

Further expansion will be supported by Kippa’s business model. The company offers its app for free, which encourages adoption, and then receives a commission on the transactions it enables. Further income comes from companies that use Kippa to pursue incorporation.