On the Brass acquisition- initial thoughts

powers & principalities unleashed

A New Era for Nigerian Fintech?

Spiritual warfare has been unleashed across the Nigerian fintech sector with the disclosed acquisition of Brass.ng by a consortium of operators & investors. I saw the announcement today, and I saw a vision of the words “powers and principalities”. Per Google’s Gemini "principalities and powers" is a phrase used to describe invisible angelic forces that can be good or bad. Only time will tell the true nature of this transaction, but it's a powerful consortium that I suspect will change the nature of battle in the SME ecosystem. I can only imagine that such a heavy consortium was built as a natural reaction to Carbon’s SME platform, which launched just a few months ago. According to MHO¹ research, in just three months, Carbon has the best product on the market, beating other established players. With features such as sub-accounts, expense approval automation, invoice cre…… Sorry, I forgot that this is about Brass, not Carbon. My apologies. Anyway, the ultimate winner will be small and medium-sized enterprises that have long been underserved by financial institutions. It may even be good for other fintechs as a signal of renewed interest in the more productive sectors of fintech. So for Carbon and others targeting SMEs, is this Brass transaction cause for prayer or jubilation?

Powers & Principalities

One can’t ignore the fact that this deal brings together two of the largest and most loved operators - Paystack & Piggyvest - combining execution savvy and enough customers to feed on. Good soup na lack of money kill am as they say in my village. This soup will be sweet with the presence of Ventures Platform, a storied local investor led by the irrepressible Kola Aina and p1.ventures, a quiet but persistent VC that has been quietly eating sweet food for years. With future funding secured, Brass will not be short of pocket money as it grows up.

This is exciting news for the ecosystem. I am a big fan of the consortium members, and their involvement and the increased competition will increase the service levels for SME customers. Carbon saw this gap in the market, which is why, shameless plug, we launched our own beautiful SME platform earlier in the year.

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Ehen, as I was saying, the Brass consortium makes for a wonderful group from all indications. But, but, but……. a close examination of the membership list will show that a key criterion was the presence of the letter ‘P’ in your name.

Paystack - Piggyvest - Platform - P1.

Powers. Principalities. I think you understand me now.

Strategic Moves and Market Impact

Per the good book, many will “wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places”. My dear brothers and sisters, does this consortium come from the shadows or the light? Or are we seeing the start of a new type of cult? Maybe as we speak nefarious groups are forming unholy alliances, dancing naked in front of shrines with the intention of feasting on other startups:

1. Moove+Moneypoint + Magic Fund + Microtraction

2. Flutterwave + Fairmoney + Flourish + Future Africa

Founders, if any of these (and there may be others) invite you for a meeting make sure you meet in public, well-lit spaces. I shall be monitoring techcabal for the next few days for news of missing founder. This is a developing situation but consortiums should remember that in the alphabet the next letter after B(rass) is C(arbon).

Hint hint, nudge nudge 🤣

Future Prospects and Market Dynamics

1. I have long predicted consolidation in the ecosystem - its the only way to survive given the excessive funding environment in recent years coupled with an unforgiven macroeconomy that is harsh on a good day. The Brass consortium is interesting in that it brings in operators regulated under different regimes into what is probably the most regulated of them all, banking. Is this the start of a reverse universal banking play? Is the P-consortium on the hunt for an insurance platform to complete the trinity of asset management, banking and insurance?
   

2. Will Brass now focus on a fee structure or start building out its lending muscles? This will require significant investment in credit risk systems and personnel with experience in lending. Blood of Jesus please redirect all recruitment adverts from Brass to Fairmoney, Branch and Moniepoint. To my beloved colleagues in Carbon, don’t forget how it is me that taught you about first payment defaults and roll rates. Please don’t talk to strangers and remember that I love you always.
   

3. Given the capabilities of the investors, what new products or innovations can we expect from the new Brass? These are exciting times for players in the system. What does it mean for services offered by other B2B players, and how will they react? Carbon’s account already provides several features that are the core features of other fintech startups - reconciliation, accounting automation, invoicing, workflow approvals, etc (This is not an advert, but you can sign up here for your business account). How will other operators react?

Conclusion

The acquisition of Brass heralds exciting times for the Nigerian fintech sector. As consolidation continues, we can expect increased competition, better services for SMEs, and a dynamic shift in market dynamics. For now, all eyes are on Brass and its consortium of ‘powers and principalities’ as they navigate this new chapter. These are Definitely exciting times and some positive news for a change. Congrats to all the powers and principalities. And to other operators, don’t walk home alone late at night. Unless, of course, you have ulterior motives.

1. MHO Research - My Humble Opinion Research