Micro, small, and medium-sized firms (MSMEs) are pivotal in Nigeria’s economy, contributing over 60% of GDP growth and driving job creation. However, most of these firms operate informally, hindering their access to essential financial services and digital tools, according to the National Bureau of Statistics. Nigeria-based merchant solution platform Traction aims to address the challenges small businesses face. They recently announced a $6 million seed round. Pan-African investor Ventures Platform and Multiply Partners, with participation from P1 Ventures and others, anchored the investment.
Source: Traction
The platform, founded in 2020 by Mayowa Alli and Dolapo Adejuyigbe, enables small companies to receive payments, manage accounts, and access vital operational tools. The founders identified the gaps in financial services for SMEs and created a bank-agnostic platform offering end-to-end solutions. Starting with point-of-sale software and POS terminals for payments, Traction also provides merchant wallets, cash advance loans, savings, and bill payments.
Traction serves two categories of merchants: classic and premium. Classic merchants, like street food sellers and neighborhood stores, often have their first digital payment experience with Traction. They comprise 75% of the platform’s user base. However, premium merchants seeking more appealing products have shifted from traditional banks to Traction. Moreover, the platform serves various sectors for both categories, including food and restaurants, FMCG and grocery chains, fashion, beauty, and lifestyle enterprises, electronics stores, and healthcare facilities.
Unlike its competitors, Traction’s product immediately met the needs of retail business owners, resulting in significant success and customer loyalty. It also partnered with other ecosystem players to provide the aforementioned vertical-specific offerings.
Traction’s $6M seed funding signifies its dedication to empowering Nigerian MSMEs and revolutionizing the merchant acquiring space. As the platform grows and expands, it remains committed to providing tailored financial solutions to business owners across various industries.