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Is Brass’ acquisition a strategic or rescue move?

While acquisitions are usually cause for celebration, there’s some unease here.

Just two months ago, Brass made headlines for failing to provide customers with access to their deposits. Their business banking product, meant to support small businesses, ended up causing more problems, leaving employers unable to pay salaries and businesses struggling to buy supplies.

Founded in 2020 by Sola Akindolu (CEO) and Emmanuel Okeke, Brass aimed to make banking easier for small businesses in Nigeria. They raised significant funds and onboarded around 5,000 businesses. However, by October 2023, customers started facing issues accessing their deposits.

Akindolu blamed these issues on funding challenges, stating that only a small fraction of their customers were affected. He highlighted the need for substantial capital to disrupt traditional banking effectively.

Despite his explanation, the fact that Brass, a deposit-taking institution, couldn’t provide customer deposits raises serious concerns about its operations.

Kamusta,

Victoria from Techpoint here,

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Is Brass’ acquisition a strategic or rescue move?

Brass co-founders
L-R: Emmanuel Okeke and Sola Akindolu, Co-founders of Brass

Remember this? Paystack and PiggyVest join forces in Brass acquisition

While acquisitions are usually cause for celebration, there’s some unease here.

Just two months ago, Brass made headlines for failing to provide customers with access to their deposits. Their business banking product, meant to support small businesses, ended up causing more problems, leaving employers unable to pay salaries and businesses struggling to buy supplies.

Founded in 2020 by Sola Akindolu (CEO) and Emmanuel Okeke, Brass aimed to make banking easier for small businesses in Nigeria. They raised significant funds and onboarded around 5,000 businesses. However, by October 2023, customers started facing issues accessing their deposits.

Akindolu blamed these issues on funding challenges, stating that only a small fraction of their customers were affected. He highlighted the need for substantial capital to disrupt traditional banking effectively.

Despite his explanation, the fact that Brass, a deposit-taking institution, couldn’t provide customer deposits raises serious concerns about its operations.

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The acquisition by Paystack’s group of investors has been received positively, but questions remain. Was this move a strategic acquisition or a way to salvage investor funds? 

Source

techpoint.africa

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