Brass, a Nigerian fintech startup that provides business banking services to small business owners, has blamed persistent withdrawal delays on the funding environment and an increase in its number of customers.
“The funding winter and the economic situation in Nigeria affect the abilities of companies of our kind to support many customers after some time,” said Sola Akindolu, the company’s CEO.
[ad]While Brass raised $2m in 2021, Akindolu acknowledged the expensive nature of running a fintech startup.
“You can say you want to disrupt banks; if you raise $1-2 million, you must raise $5-10 million in a few years. If it is overdue and you have not, things will get tricky,” said Akindolu. “You need access to ridiculous capital.”
Brass approached Nomba as part of conversations around a fundraise, two sources said. One highly-placed person said the company also discussed raising debt financing and expects to close funding in two weeks.
[ad]“It is not in any way new for fintechs to approach and support one another behind the scenes,” Brass said in response to questions about raising money from Nomba. “We have been approached and provided support too, even to competition. And you can generally confirm that. And no, we didn’t approach Nomba for equity financing.”
Founded in 2020 by Akindolu, Brass was generally loved by its customers until withdrawal delays began around October 2023, three people said.
“I could not pay my staff in Nigeria last month, and I also had to pause my building project because I could not buy materials,” said Samuel, a Brass user who claimed he could not transfer funds for over a month. TechCabal saw screenshots of his failed transactions.
“I have over 10 million naira there and can’t even use my money.”
Mercy, another Brass user, shared similar complaints after she tried to withdraw money from her account in December.
“When I contacted Brass [about the transfer issues], I always got the same response: “We’re working on it.“ She was eventually able to make withdrawals.
Despite the widespread nature of these complaints—there have been social media callouts of the CEO—Akindolu insists that only 80 businesses have experienced these delays. “Once escalated, the resolution does not take over 24 hours,” Akindolu claimed.
The company also says that it is working hard to resolve the issues.
Resolving customer complaints
In February, Brass created a second Telegram channel to resolve user complaints, and screenshots showed that while customer complaints were acknowledged, they remained unsolved for weeks.
The startup also changed the phone number of its customer care hotline several times without sharing it on social media. It forced users to share their complaints on X and Instagram, with at least several people sharing their frustration at the company’s poor communication.
Akindolu disputes that characterisation.
“I am very accessible. Customers even call me on my phone number to relay their complaints, and I attend to them as soon as possible,” Akindolu said.
Staff cuts at Brass
On Monday morning, Akindolu shared in a thread on X that Brass would furlough an undisclosed number of employees to cut costs. Impacted employees will continue to access “health insurance coverage and other benefits until we are able to bring them back in the following months,” Akindolu tweeted.
“[Akindolu’s] communication with us on the matter was limited to the scope of the post he made online, an employee told TechCabal.
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