Credit startup, Payhippo closes $3m seed raise, to improve access to finance for small businesses in Nigeria

Credit startup, Payhippo has announced a $3 million seed funding raise. This brings the fintech startup’s total raise to $4 million in just four months. It raised $1m pre-seed for its large scale expansion in July.

The round was led by influential African fintech founders and financial leaders Ham Serunjogi and Maijid Moujaled, co-founders Chipper Cash.

Other investors include Olugbenga “GB” Agboola, founder Flutterwave, Bolaji Balogun, CEO 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 preseed investors. Institutional investors include TEN13, VentureSouq, and Prodigio Capital.

Payhippo participated in the Y Combinator Summer 2021 cohort. The startup was founded in August 2019 by three co-founders, Zach Bijesse, CEO, Chioma Okotcha, COO, and Uche Nnadi, CTO. It provides small businesses with access to credit in less than three hours; with instant financing, business owners can make investments needed for growth.

Having worked in fintech and lending organizations in Nigeria, the team had the vision to create an innovative lending product for small businesses in Africa.

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.”

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.

Payhippo provides small businesses with short-term working capital with average loan amounts of $1300 and allows them to use the principal amount during the entire tenor, using the money to run their businesses entirely.

The 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.

To date, Payhippo has disbursed 5000 loans to small businesses across Nigeria. In September 2021, the company earned $64,000 in revenue from $900K disbursed, experiencing 25% monthly growth with a 97 per cent repayment rate on loans.

One of the leading investors, 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.”