Nigerian fintech startup Payhippo has raised US$1 million in pre-seed funding to scale its offering, which provides vital loans to small businesses.
Launched in January of last year by Chioma Okotcha, Uche Nnadi and Zach Bijesse, Payhippo provides loans to small businesses in Africa, often neglected by banks because of their lack of credit histories, in under three hours.
So far, Payhippo, which helps customers generate their own alternative credit scores, has disbursed over 2,600 loans to businesses, and had a 97 per cent repayment rate. Previously funded by family and friends, some notable Nigerian angels, and early-stage venture builder Aidi Ventures, it has now secured a US$1 million pre-seed round to help it grow.
Investors include Ventures Platform, Future Africa, Launch Africa, Sherpa Ventures, DFS Lab, Hustle Fund and Mercy Corps Ventures.
“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 was still such a big need for SMEs in Nigeria and the continent,” said Okotcha.
“Small businesses are at the core of Africa’s economic growth and we are thrilled to partner with Zach, Chioma and Uche as they build Payhippo. They are essentially bridging the US$158 billion SME financing gap,” said Kola Aina, general partner of Ventures Platform Fund.
“Payhippo’s execution has been phenomenal and we are excited to support the impact they will create across the chronically underserved SME funding landscape in the coming years.”