As part of its efforts to help small businesses in Nigeria get the finance they need, Payhippo announced that it has secured $3 million in seed funding.
Ham Serunjogi and Maijid Moujaled, co-founders of Chipper Cash, Olugbenga “GB” Agboola, founder of Flutterwave, Bolaji Balogun, CEO Chapel Hill Denham, and Hakeem Belo-Osagie, founder of Metis Capital Partners, led the round. Other angel investors include Paystack, Brex, and Tala management, as well as several limited partners from Payhippo’s preseeded investors. TEN13, VentureSouq, and Prodigio Capital are among the institutional investors.
Payhippo was founded in August 2019 as a Y Combinator Summer 2021 cohort company by three co-founders: Zach Bijesse, CEO, Chioma Okotcha, COO, and Uche Nnadi, CTO. The team had the idea to establish a unique loan product for small businesses in Africa after working in fintech and lending firms in Nigeria. Payhippo enables small businesses to obtain loans in less than three hours; with immediate financing, business owners can undertake growth-related expenditures.
Payhippo has disbursed over 5000 loans to small businesses in Nigeria to date. In September 2021, the company earned $64,000 from $900,000 disbursed, a 25% monthly growth rate, and a 97 percent loan repayment rate.
Small enterprises contribute significantly to employment creation and global economic development in the majority of economies. Small enterprises account for 96 percent of firms in Nigeria, 84 percent of employment, and 48 percent of GDP. Nigeria has 40 million small enterprises, yet only a small percentage have access to official funding. This is a big issue since businesses cannot invest or grow without working money. While the majority of small firms are creditworthy, obtaining credit is difficult due to their lack of finance scores. The collateral requirements of traditional lenders are excessive. If a business successfully completes the process, it may take up to three months to collect the funds.