Payhippo, a Nigeria-based fintech which loans to small businesses in Africa in under 3 hours, has secured $1m in pre-seed funding round led by Africa tech investors such as Ventures Platform, Future Africa, Launch Africa, Sherpa Ventures, and DFS Lab. International investors Hustle Fund and Mercy Corps Ventures also invested. Payhippo had prior Friends and Family backing from notable Nigerian angel investors and from early stage venture builder — Aidi 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.” Chioma Okotcha, Payhippo Cofounder and COO
Payhippo will use the preseed funds to hire more engineers and a Head of Finance to keep up with the current growth.
Why The Investors Invested
Funding came to Payhippo for many reasons, including that it has a relatively large market size of $46b in Nigeria, part of which Payhippo’s founders have a personal connection to.
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“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.” commented Kola Aina — General Partner, Ventures Platform Fund.
Investors also seem to have invested given the traction the startup has generated over time. While growing revenue 25% month on month, Payhippo has had a 97% repayment rate despite since January 2020. Since it started in January of 2020, Payhippo has also disbursed over 2,600 loans to businesses. These are the community grocery stores or small retail shops that are part of the critical infrastructure of their communities, but are left outside of the traditional financial system.
“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.” Said Mr. Aina.
A Look At What The Startup Does
Founded in 2020 by the trio of Chioma Okotcha, Uche Nnadi and Zach Bijesse, Payhippo assesses businesses, builds their Payhippo Scores, and provides financing to them.
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“I am proud of our platform. There are endless issues that Nigerian SMEs experience with financing but we’ve been taking it one step at a time. I talk to our borrowers every day to get product feedback. Our borrowers tell us that our loans are more seamless than anything else they have seen in the market.” Uche Nnadi, Payhippo Cofounder and CTO.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer