Nigeria's neo-banking market is picking up steam with new funding rounds announced for credit-based platform Lydia and online and mobile savings startup Piggybank.ng.
Lydia, which focusses on improving access to credit for micro-, small-, and medium-sized enterprises (MSMEs) in Africa, was first out of the blocks on Wednesday, announcing a $6.9 million Series A investment round led by Omidyar Network, the Silicon Valley impact investment firm established by the founder of eBay.
Using the app, MSME's can create a free account online in less than 15 minutes, and then share or load bank account or transaction information to the platform. The data can be used for access to credit, to manage cash flows, customer data, and create and send invoices digitally.
“Access to flexible, affordable credit is at the crux of unlocking growth in the MSME sector. Lidya is addressing that by using smart algorithms to analyze transaction data from small businesses to assess their creditworthiness,” says Ameya Upadhyay, investment principal at Omidyar Network and Lidya’s newest board member. “This data-driven approach allows the company to offer loans without the need of hard collateral-a requirement that has scuttled MSME financing in Africa. In the process, Lidya gathers insights that help expand its product portfolio to become a holistic partner to small businesses.”
The news from Lydia was followed today by an announcement from Piggybank.ng, an online and mobile app savings platform targeted at African millennials, that it has closed on seed funding of $1.1M from a group of high net worth angel investors and VCs.
Founded in 2016, Piggybank.ng has built a savings community of over 53,000 registered users of which approximately 60% are Nigerian millennials, who have saved in excess of $5 million, with a savings growth of 3000% between 2016-17.
Having recorded 20-35% m-o-m growth in user participation over the past 12 months, the company says it will use the new capital for license acquisition and product development.
Joshua Chibueze, co-founder and CMO of Piggybank says: "With this fundraise, we can invest significantly in our people and products, as we build a digital financial warehouse accessible to millions of Africans whose savings woes we want to put firmly behind them.”