Grace Ashiru
Micro, Small, and Medium-sized firms (MSMEs) hold significant importance in the Nigerian economy, accounting for more than 60% of GDP growth and playing a crucial role in job creation. Nonetheless, many of these enterprises operate informally, which challenges their access to digital tools and financial services.
In response to this gap, startups like Traction have surfaced, aiming to bridge the divide by offering fintech solutions to empower small businesses. Established in 2020, Traction provides a bank-agnostic platform that facilitates end-to-end sales payment solutions and grants access to various financial services, including point-of-sale software, virtual accounts, cash advance loans, and bill payments.
Traction caters to two distinct types of merchants: classic, encompassing street food sellers and neighborhood stores, and premium, comprising more formal businesses. The platform serves both categories across various verticals, including food, fashion, electronics, and healthcare, offering customized solutions to meet their specific needs.
As per the startup’s claims, it has achieved remarkable metrics, witnessing substantial revenue and transaction growth of up to 800%, serving over 70,000 businesses in Nigeria. It has also disbursed over N2 billion in loans to MSME retailers.
In a recent development, the Nigeria-based merchant solution platform disclosed a $6 million seed round aimed at accelerating its growth within Nigeria, reinforcing its team, and exploring expansion opportunities beyond its borders.
The new funding substantially boosts realizing its ultimate goal of supporting retail SMEs and delivering valuable financial services to underserved businesses in Nigeria. Notably, the funding round witnessed participation from various investors, including Pan-African investor Ventures Platform, Multiply Partners, P1 Ventures, and other interested parties.
