Nigerian fintech startup, PayHippo announces that it has closed a $1 million pre-seed round to expand its reach to more Nigerian cities and also build its team of engineers. It also plans to hire a Head of Finance to match the business current growth rate.
The round was led by Pan-Africa VCs, Ventures Platform, Future Africa, and Launch Africa. Other investors include Africa-focused VC, Sherpa Ventures; Hustle Fund; and Mercy Corps Venture.
Founded in January 2020 by Zach Bijesse (CEO), Chioma Okotcha (COO), and Uche Nnadi (CTO), Payhippo’s goal is to give African small businesses access to finance while at the same time helping them to build their credit history. Since its launch, the startup claims to have disbursed over 2,600 loans to businesses and is currently making a 25% M-o-M revenue growth.
Despite kicking off the disbursement of loans to businesses in the early part of 2020 when the Covid-19 induced lockdown was having a devastating effect on businesses and economies worldwide, PayHippo has claimed to have had a 97% repayment rate.
They achieved this by making sure requesting businesses are not over-financed to the point that they can’t pay back.
“Small businesses hear about Payhippo through our direct outreach and then sign up to our platform via payhippo.africa. Then we assess 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.” CEO Bijesse explained in his statement
“Most of these 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. That’s why Payhippo assesses businesses, builds their Payhippo Scores, and provides financing to them.”CEO, Zach Bijesse
Speaking on the investment, Kola Aina General Partner, Ventures Platform Fund said “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.”
Interested businesses can sign up on their platform via payhippo.africa