If there’s any Nigerian bank that has been at the forefront of engaging the local business community with initiatives designed specifically for startups, that would be Union Bank, one of the oldest banks in the country.
From partnering with the Co-Creation Hub for the launch of a business acceleration program called ‘Start-up Connect’ to celebrating top 100 Nigerian SMEs that have been thriving despite the challenging business environment in partnership with Connect Nigeria, it seems that the 100-year old bank is positioning itself to become a startup-friendly bank.
With the official launch of a new initiative called Tech Ventures which it describes as “a dedicated desk tailored to catering to the needs of emerging tech companies at various stages,” Union Bank is betting on its experience and knowledge in helping businesses unlock and reach their potential.
The bank points to access to Venture Capital, co-working spaces, business incubation, partnerships and marketing support as the most important needs of tech ventures at various stages of the lifecycle.
Tech Ventures by Union Bank has three packages: the Nuture Bundle, the Scale Bundle, and the Unicorn Bundle.
The Nuture Bundle, aimed at young tech ventures with developing business models, provides collateral-free loans up to N1 million as start-up capital or working capital, legal assistance, technical and business mentors from the Union Bank and its tech hub network, and a 6-month accelerator program with access to office space, utilities and reliable internet.
The Scale Bundle, aimed at tech ventures, typically between three to five years old, with established business models and looking to expand their businesses, provides funding, equipment, business advisory and relevant partnerships in the areas of accounting, human resources, payroll and logistics in order to scale the business.
The Unicorn Bundle, aimed at tech ventures, typically over five years old, that have acquired some form of funding to expand their businesses, provides credit options such as overdraft facilities to assist with the day-to-day running and term loans to fund further expansion, business advisory services as well as access to unique partnerships, distribution channels and the bank’s customers.
All three plans boast moratoriums on account charges for 1 year, 6 months and 3 months, for the Nuture, Scale and Unicorn packages respectively, thus providing the tech ventures with a kind of financial ‘tax break’ for a period.
Startups will need to open a Union Bank account, with a business registration at the Corporate Affairs Commission; must have a technical lead and founders that are fully committed with at least 30% equity contribution from the partners; and must have a strong business plan including financial projections and evidence of transaction value and volume.
Union Bank’s Tech Ventures initiative seems to be a very smart way of investing in tech startups while increasing the bank’s customer base with newly formed and already established ventures that are looking to scale up their business operations.
Indeed, an excellent way for the 100-plus-year-old bank to maintain its relevance in the short, medium and long term, while positioning it as startup-friendly, especially in today’s highly competitive financial industry where we have witnessed unexpected mergers and take-over of distressed banks.