Nigerian fintech startup Piggybank.ng today announced it has secured a US$1.1 million seed funding round, to be used for licence acquisition and further product development.
Launched in 2016, Piggybank.ng provides an automated savings platform enabling users to manage their finances by depositing small amounts of money – starting from as little as US$1 per day – on a daily, weekly or monthly basis, depending on their saving target, free of charge.
Users earn on average six per cent per year on automated savings, or 10.95 per cent per annum on the fixed deposit product, Safelock.
The startup is targeting Nigerian Millenials and low-middle income earners, many of whom have no access to credit. Since launching, the platform has attracted 53,000 registered users – of which approximately 60 per cent are Nigerian Millennials – with savings in excess of US$5 million.
“In a country such as Nigeria, almost everything has to be paid in advance. The majority of Nigerians struggle to save their income, manage cash flow and build credit, which is a huge problem as around 80 per cent of Nigerians need to save a minimum of 40 per cent of their monthly income, in order to survive,” says Odunayo Eweniyi, co-founder and chief operating officer (COO) of Piggybank.
“This is the sheer scale of the challenge we are embracing; to actively promote a savings culture in Nigeria and act as the savings infrastructure to millions of people who want a safe, transparent and innovative platform to assist them in managing their finances, on their journeys to financial freedom.”
The company has recorded between 20 and 35 per cent month-on-mont growth in user traction over the past 12 months; primarily from peer-to-peer recommendations, its referral programme, and outreach activities. In addition to licence acquisition and new product roll-out, some of the funding raised will be used to ramp up marketing efforts.
“Today’s announcement allows us to expand and capitalise on the many opportunities that the market presents us with. Our growth so far has been stimulated almost entirely by peer-to-peer advocacy and our investment in the highest quality customer service, so we know the market is there, and the product has been built, modified, tested and ratified by users. With this fundraise, we can invest significantly in our people and products, as we build a digital financial warehouse accessible to millions of Africans whose savings woes we want to put firmly behind them,” said Joshua Chibueze, co-founder and chief marketing officer (CMO) of Piggybank.
In addition to the funding round, Piggybank also announced it has recently acquired a micro-financing license from the Central Bank of Nigeria (CBN), which provides the relevant regulatory cover, allowing them independence from partnering with banks.