Nigeria’s Payhippo had raised US$1 million in Pre-seed funding to provide loans to Small Businesses.
The US$1m pre-seed funding round is composed of Africa tech investors such as Ventures Platform, Future Africa, Launch Africa, Sherpa Ventures, and DFS Lab. International investors Hustle Fund and Mercy Corps Ventures also invested. Payhippo has prior backing from notable Nigerian angel investors and from early-stage venture builder — Aidi Ventures.
Founded in 2020 by Chioma Okotcha, Uche Nnadi and Zach Bijesse, PayHippo provides loans to small businesses in Nigeria.
Most of the small business businesses are creditworthy, but traditional banks and lenders don’t lend to them because there are no credit scores and collateral requirements are too high. And Payhippo assesses businesses, cash flow and business owner data to determine what size loan is right for them. Most importantly, business owners build a Payhippo score to access up to 3x the amount of financing over time. Payhippo provides financing to them in under 3 hours.
“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.” Chioma Okotcha, Payhippo Cofounder and COO.
“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 US$158 billion SME financing gap,” commented Kola Aina — General Partner, Ventures Platform Fund.
The market size for SME lending in Nigeria is US$46 billion. And Payhippo’s founders have a personal connection to this market opportunity.
Since its inception in January of 2020, Payhippo has disbursed over 2,600 loans to businesses and growing revenue 25% month on month with a 97% repayment rate
“These are the community grocery stores or small retail shops that are part of the critical infrastructure of their communities, but are left outside of the traditional financial system.” Says Zack Bijese, Co-founder and CEO, Payhippo.
Payhippo will use the funding to hire more engineers and a Head of Finance to keep up with the current growth.