Payhippo, a Nigerian lending startup, has raised $3 million in a seed funding round. The investment was led by several angel investors, including Ham Serunjogi and Maijid Moujaled, the co-founders (Chipper Cash); Olugbenga Agboola (Flutterwave); Bolaji Balogun, (CEO, Chapel Hill Denham); and Hakeem Belo-Osagie (founder, Metis Capital Partners). The new funding follows the $1 million the startups raised back in July.

Payhippo plans to use the new investment in sourcing the talent needed to optimize its technology as it doubles down on its efforts to provide quick to more small and medium-sized enterprises (SMEs) in Nigeria. 

Founded in 2019 by Chioma Okotcha (co-founder and chief operations officer), Zach Bijesse, and Uche Nnadi, PayHippo is an AI-Driven lending platform making it easier to finance small and medium-sized businesses. The startup which is is part of the 2021 Y Combinator summer cohort says its Unique Selling Point (USP) is that it disburses short-term loans in less than three hours.

“We had seen that traditional banks and lenders wouldn’t loan small businesses mainly because there were no credit scores, or the collateral requirements were too high. We decided to come into the market and create an instant financing option, where we create a credit score that allows small businesses to get the liquidity they need to buy inventory for business continuity,” says co-founder and chief operations officer 

“We use data from historical records that borrowers have built with us, but we also check their banking history to see the actual performance of their businesses,” said Okotcha.

Payhippo applies its own credit scoring formula that uses different SME data to determine the value of loans to give out. The loans are disbursed through mobile phones. The average loan disbursed by Payhippo is about $1,300, with the minimum loan being about $200.

Payhippo says it is banking on its fast turnaround time for loan applications to grow its customer base within Nigeria before venturing to other countries. The company says it has so far disbursed about 5,000 loans since inception, valued at $1 million and with a repayment rate of 97%, earning them $64,000 in revenues. It added that the demand for credit is high, fueling its current 25% month-on-month growth.

Musa Suleiman
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