Nigeria’s lending startup Payhippo has raised $3 million in a seed round to grow its business.
The round was led by fintech founders of Chipper Cash Serunjogi and Maijid Moujaled, Olugbenga Agboola of based payment company Flutter wave, in San Francisco; Bolaji Balogun, CEO, Chapel Hill Denham and Hakeem Belo-Osagie, founder of Metis Capital Partners and many more angel investors.
According to an online publication, Chief Operations Officer of Payhippo, Chioma Okotcha stated that despite this huge accomplishment, the company is still looking to hire more skilled engineers and data scientists.
“The funding will allow us to invest in hiring more engineers and data scientists. We aim to improve our technology and enhance our lending offerings as we continue to address the persistent financing gap for small businesses in Nigeria. At Payhippo, our vision is to provide millions of small businesses with sufficient and available capital to run and grow their businesses.”
Payhippo’s mission is set on providing financial services or aid to SME merchants, since its birth in 2019. The company provides working capital in the form of average loans to business owners to enable them invest and run their businesses.
“We had seen that traditional banks and lenders would not lend to small businesses, mainly because there was no credit rating or the collateral requirements were too high. We made a decision to go out and create an instant funding option where we would create a credit score that would allow small businesses to get the liquidity they need to buy inventory for business continuity”, said Okotcha.
So far the company has disbursed about 5,000 loans to small businesses across the country since August 2019. With its average loan given at $1,300, and minimum at about $200.
In September 2021, the company earned $64,000 in revenue from $900K disbursed, experiencing 25% monthly growth with a 97 per cent repayment rate on loans.
Payhippo is driving on financial inclusion by creating accessibility to finances for small businesses. Businesses can apply for loans through the company’s online platform by providing their business details, and in a few hours get the loans they ask for.
The company, however, tracks the data from historical records these businesses have with them, and checks their performances. Overtime they become eligible for higher amounts of capital once they repay their loans on time.
The company’s COO has further stated that Payhippo’s target is to meet the needs of nearly 40 million SMEs in Nigeria and disburse over 40,000 loans a day in order to grow its business in the future.
Its new seed round is the largest amount the company has raised, after receiving $ 1million in pre-seed funding earlier this year.