Micro, Small, and Medium-sized firms (MSMEs) have grown to be very important in the Nigerian economy, constituting over 60% of GDP growth and playing a vital role in job creation. However, many of these businesses operate informally, hindering their access to digital tools and financial services.
To address this gap, startups like Traction have emerged, providing fintech solutions to empower small companies. Founded in 2020, Traction offers a bank-agnostic platform that enables end-to-end sales payment solutions and access to various financial services, such as point-of-sale software, virtual accounts, cash advance loans, and bill payments.
Traction caters to two types of merchants: classic, which includes street food sellers and neighbourhood stores, and premium, which comprises more formal businesses. The platform serves both categories across various verticals, including food, fashion, electronics, and healthcare, with customized solutions.
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According to the startup, it has achieved impressive metrics, experiencing significant revenue and transaction growth of up to 800% while serving over 70,000 businesses in Nigeria. It also noted that it has disbursed over N2 billion in loans to MSME merchants.
Now, the Nigeria-based merchant solution platform has announced a $6 million seed round to accelerate its growth in Nigeria, strengthen its team, and explore expansion opportunities beyond the country's borders.
The new funding is a significant boost towards achieving its ultimate goal of supporting retail SMEs and providing valuable financial services to underserved businesses in Nigeria. The funding round saw participation from investors like Pan-African investor Ventures Platform and Multiply Partners, P1 Ventures, and other investors.