Nigerian SME lending company Payhippo lands $3m seed funding
Payhippo, a lending startup that is widening credit access for small businesses in Nigeria, announced today that it raised $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, founder of Flutterwave; Bolaji Balogun, CEO of Chapel Hill Denham; and Hakeem Belo-Osagie, founder of Metis Capital Partners. Other angel investors include management from Paystack, Brex, and Tala and several LPs from Payhippo’s preseed investors. Institutional investors include TEN13, VentureSouq and Prodigio Capital.
Payhippo provides small businesses with access to credit in less than three hours. With instant financing, business owners can make investments needed for growth.
To date, Payhippo has disbursed 5,000 loans to small businesses across Nigeria. In September 2021, the company earned $64,000 in revenue from $900,000 disbursed, experiencing 25% monthly growth with a 97% repayment rate on loans.
Payhippo is driving financial inclusion for small businesses by creating accessibility to financing. A business can apply for a loan through the company’s online platform by providing their business information. Through their backend technology system, the firm uses KYC checks to verify the business’s cash flow data, business owner data, and industry data – all within a few minutes. In a couple of hours, the company receives its loan. Payhippo provides small businesses with short-term working capital with average loan amounts of $1,300 and allows them to use the principal amount during the entire tenor, using the money to run their businesses entirely. Businesses then repay the whole loan at the end of the loan period. Small companies can then build their Payhippo score based on their track record – by repaying their loans on time, they become eligible for higher amounts of capital.
Chioma Okotcha, co-founder and COO, Payhippo said, ”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.”
Bolaji Balogun, founder and CEO of Chapel Hill Denham said, “We’re excited at how Payhippo is 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.”
Ham Serunjogi, co-founder and CEO of Chipper Cash said, “New financial technologies are 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.”
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