By Adedapo Adesanya
Nigerian startup, Pivo, which helps freight carriers get paid faster by providing banking services and digital invoicing tools that track payments, has closed a $2 million seed round.
This is in addition to a $550,000 pre-seed round it raised earlier this year.
The startup, which was part of Y Combinator’s S22 batch, counts Precursor Ventures, Vested World, Y Combinator, FoundersX and Mercy Corp Ventures as its investors in this round.
In a statement, the company said it intends to use the financing to upgrade existing products, build new ones, hire talent and expand outside of Lagos, its first market and other African countries, particularly in East Africa.
The firm, founded by Mrs Nkiru Amadi-Emina and Mrs Ijeoma Akwiwu in July 2021, provides financial services — credit, payments and expense management — to SME vendors within large manufacturing supply chains.
Pivo leverages manufacturing supply chain relationships and deploys financial services to the SMEs within them, mostly truckers in this instance.
The credit play of its platform, Pivo Capital, serves as an early payment alternative for truckers and allows logistics companies to deal with any upfront costs — such as diesel and driver’s allowance — typically incurred during operations. Pivo Business, its payments reconciliation arm, helps these small businesses to facilitate payments via peer-to-peer transfers and track payments with debit cards with spend controls.
“After our pre-seed raise of $550,000 early in Q1 of this year, we launched a new product, Pivo Business, with features that supply chain SMEs can use to achieve better cash flow,” the company said.
The transaction volume of Pivo Business accounts grew by over 400% between April and September. With this funding, we intend to build on existing products and develop solutions for supply chain anchors.”
The freight carrier–focused digital bank currently serves about 500 SMEs as direct customers and makes revenue by charging interest on capital and fees on payments processed.
Mrs Amadi-Emina said Pivo Capital has disbursed over $3 million to SMEs and currently records a 98 per cent repayment rate while transaction volume on Pivo Business grew over 400 per cent between April and September this year. The startup has registered a total volume of $4.7 million from July to date.
On his part, Mr Daniel Block, Investment Principal at Mercy Corps Ventures, alluded to that experience when commenting on their reason for investing in the startup.
“When we initially invested last year, we believed that the founders’ deep logistics industry expertise and commitment to unattended supply chain SMEs would enable Pivo to rapidly carve out a deep moat in the competitive fintech lending space. As Pivo launches additional products to graduate from a pure fintech lender to a full-fledged financial services platform, we are excited to see the company deliver a full suite of financial services specifically designed for the needs of the unattended supply-chain sector SMEs they serve.”