Paystack and PiggyVest join forces to acquire Brass

The news:

• Nigerian digital small business bank Brass has been acquired by an investment group led by Paystack. PiggyVest, Ventures Platform, P1 Ventures and angel investors Olumide Soyombo and Oo Nwoye round out the group.
• As a result of this acquisition, the company’s co-founders, Sola Akindolu and Emmanuel Okeke, will leave the company.
• The acquisition comes months after the company prevented customers from withdrawing funds, blaming a financing freeze.

However, this acquisition will not impact the company’s customers and employees as the product will remain the same.

According to Brass CEO Akindolu, “Brass will continue to build and support its clients and grow with its new leadership team, while the founding leadership team will leave to pursue other opportunities.”

“Each member of the investment group brings several years of experience in financing and building reliable financial services products, and with this new capital injection, we look forward to the next stage of Brass’ growth,” Paystack said in a statement.

The Paystack-led acquisition comes three months after Brass was unable to give customers access to their deposits, blaming a funding freeze and the country’s economic situation. It previously raised over $2 million from investors.

In March 2024, the company managed to receive a new capital injection, which enabled it to process payments to affected businesses.

The acquisition allows Paystack and PiggyVest to gain a foothold in a business that complements their businesses. While PiggyVest has traditionally focused on consumer finance, the acquisition of Pocket (formerly Abeg) allowed it to delve into the social payments segment. Paystack, on the other hand, has built payment tools for businesses across Africa and potentially provides a customer pipeline for Brass.

Brass is expected to take on new leadership following the departure of its founders, but no announcement has been made. Meanwhile, new management is tasked with rebuilding customer trust after a difficult few months for the four-year-old startup.

Behind TechCabalthe company is reported to have 2 billion yen of debt on its balance sheet that management is unable to settle. While the acquisition means new business for Paystack and Piggytech, there may be more liabilities to acquire than assets.