Nigerian lending startup Payhippo has closed a US$3 million seed funding round to enhance its technology capabilities to support small businesses in Nigeria with innovative solutions to unlock sources of capital for their customers.
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.
A Y Combinator S21 batch cohort participant, Payhippo has to date disbursed 5,000 loans to small businesses across Nigeria. In September 2021, the company earned US$64,000 in revenue from US$900,000 disbursed, experiencing 25 per cent monthly growth with a 97 per cent repayment rate on loans.
Payhippo banked a US$1 million pre-seed round back in July, and has swifty followed that up with US$3 million in seed funding. The round was led by influential African fintech founders and financial leaders Ham Serunjogi and Maijid Moujaled, co-founders of Chipper Cash; Olugbenga “GB” Agboola, co-founder of Flutterwave; Bolaji Balogun, CEO of Chapel Hill Denham; and Hakeem Belo-Osagie, founder Metis Capital Partners.
Other angel investors include management from Paystack, Brex, and Tala, and several LPs from Payhippo’s pre-seed investors. Institutional investors include TEN13, VentureSouq, and Prodigio Capital.
“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,” said Chioma Okotcha, co-founder and COO of Payhippo.
Bolaji Balogun, founder and CEO of Chapel Hill Denham, said he was excited at how Payhippo was using technology to provide SMEs in Africa with access to finance required to run their business needs.
“By lending to small businesses, Payhippo is allowing business owners access much-needed working capital to grow their businesses and create much needed jobs in the economy,” he said.
Ham Serunjogi, co-founder and CEO of Chipper Cash, said new financial technologies were being developed and implemented, changing the competitive landscape in the financial sector in Africa.
“Access to credit is a critical necessity for small businesses to manage their daily challenges. Payhippo helps address this need through its innovative approach that provides loans to small businesses in less than three hours enabling them to have access to sufficient working capital to grow,” he said.