African lending startup, Payhippo, has raised $1 million in a pre-seed round led by Ventures Platform.
The round had participation from other notable investors including Future Africa, Launch Africa, Sherpa Ventures, and DFS Lab. International investors Hustle Fund and Mercy Corps Ventures. Prior to the seed round, Payhippo raised funding from friends, family, notable Nigerian angel investors, and early-stage venture builder — Aidi Ventures.
Payhippo is a lending startup focused on providing loans to underserved small businesses in Africa. According to Payhippo, many of these businesses are creditworthy. However, traditional lenders overlook them because they do not have credit scores and can't meet their collateral requirements.
Payhippo Cofounder and COO, Chioma Okotcha has experience with running an underserved business. According to a release on the company's website, she helped run her family's business and encountered the financing conditions that local businesses often have to thrive under.
“I helped run my family’s business in Nigeria and I know how tough financing can be for SMEs in Nigeria. That’s why I went to work in microfinance policy. But I saw that there still that there was still such a big need for SMEs in Nigeria and the continent,” she said via the blog post.
Payhippo is plugging this gap by assessing businesses, providing financing for them, and helping them build their Payhippo Scores. So far the company has had some success with its business model.
Since it started in January 2020, Payhippo reported disbursing over 2,600 loans to businesses with a 97% repayment rate. In that time, Payhippo has also grown revenue an average of 25% month-on-month.
Speaking on the company's success so far, Uche Nnadi, Payhippo Cofounder, and CTO said, “I am proud of our platform. There are endless issues that Nigerian SMEs experience with financing but we’ve been taking it one step at a time. I talk to our borrowers every day to get product feedback. Our borrowers tell us that our loans are more seamless than anything else they have seen in the market.”
Payhippo is led by three co-founders:
- Zach Bijesse (CEO) worked at Lidya, Africa’s most well-known SME lender. He saw that fintech SME lending had a gap in providing same-day financing when the businesses need the capital.
- Chioma Okotcha (COO) worked in microfinance policy, ran her family’s SME in Nigeria, and helped build the international NGO Teach For Nigeria across multiple states in the country.
- Uche Nnadi (CTO) was a full-stack engineer at consumer lending fintech Earnest and has been mentoring Nigerian engineers for 5 years.
Speaking on the raise, Kola Aina, General Partner at Ventures Platform Fund, had this to say, "Small businesses are at the core of Africa’s economic growth and we are thrilled to partner with Zach, Chioma & Uche as they build Payhippo. They are essentially bridging the $158B SME financing gap."
“Payhippo’s execution has been phenomenal and we are excited to support the impact they will create across the chronically underserved SME funding landscape in the coming years,” Kola added
With some of Africa’s most experienced tech investors, international fintech capabilities, and local backing in Nigeria, Payhippo has announced that it will be using the pre-seed funds to hire more engineers and a Head of Finance to keep up with the current growth.