Nigerian fintech startup Lidya has closed a US$1.25 million seed funding round led by Accion Venture Lab to further its mission of easing access to finance for small and medium enterprises (SMEs) across Africa.
Launched in September of last year by Tunde Kehinde and Ercin Eksin, also founders of Nigerian online logistics startup Africa Courier Express (ACE), Lidya aims to improve access to credit and finance for Africans by using technology to help individuals open accounts, build credit profiles and access credit.
The US$1.25 million funding round was led by Accion Venture Lab, the seed-stage investment initiative of financial inclusion leader Accion, and also involved Newid Capital and several angel investors.
The investment will allow Lidya to accelerate product development and further develop its team. The company’s credit algorithms allow small businesses to build a credit score and access financing to grow their businesses, with 20,000 Nigerian businesses registered for the service.
Lidya’s digital platform uses over 100 different data points to help any SME access much-needed working capital and build a customised credit score. Once a customer has been evaluated by the platform, qualified businesses receive a loan in as little as 48 hours.
“Our vision is to digitise and streamline the credit assessment process to make it easy for any SME across Africa to access the funding they needed to grow their business,” said Kehinde.
“This round of funding and backing from our world-class group of investors is a strong validation of the potential of fintech in Africa and will position the company to be the go-to source of financing for entrepreneurs looking to grow their business,” Eksin said.
“Small businesses around the world today are unable to get the financing they need to grow and thrive,” said Michael Schlein, chief executive officer (CEO) and president of Accion.
“Innovative fintech startups like Lidya are addressing this need with technology and new sources of information to help entrepreneurs obtain the necessary capital to hire employees, expand to new markets, and sustain successful businesses.”