Nigerian fintech startup Pivo, has secured $2 million in a seed fund backed by investors such as Precursor Ventures, Vested World, Y Combinator, FoundersX and existing investor, Mercy Corp Ventures.
The investment was attracted by the company’s innovative solution to SME’s payment bottleneck that slows down the industry’s supply chain. It takes small and medium businesses several days to receive invoice after executing orders. Pivo speeds up payment for freight carriers by providing a bank account, a debit card and digital invoicing tools that track payments.
Launched in 2021 by Nkiru Amadi-Emina and Ijeoma Akwiwu, Pivo provides financial services that include credit, payments and expense management, to SME vendors within large manufacturing supply chains. These services make it easy for supply chain SMEs to make, receive and track payments.
“We launched Pivo in 2021 with our credit product, Pivo Capital. Since then we have launched Pivo Business which offers business accounts with features like invoicing and bulk payments to help SMEs manage their cash flow better. We’re focused on building an all-in-one financial services platform for supply chain SMEs and are glad to have the backing of our investors,” the company said.
Pivo in a statement 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 startup, which has raised $2.55 million since launch, noted that the prevalence of friction in companies’ management of cashflow inspired its founders to seek solution.
“In most cases, we found out that managing cash flow was the primary issue for these businesses — it was either nonexistent or just paper-based,” Amadi-Emina said. “A lot of the payments made were made with cash and we thought to build a digital bank that provides financial services geared towards solving these various problems for SME vendors that operate within large manufacturing supply chains, starting first and foremost with the logistics providers, and then gradually moving to the supplier pockets and at the tail end of things.”
Pivo said it relies on manufacturing supply chain relationships and deploys financial services to the SMEs within them.
Truckers usually need advance or full payment before they leave a depot for their destination – a situation that usually creates a vacuum in the supply chain. To solve this problem, Pivo has deployed the credit play of its platform, Pivo Capital, as an early payment alternative for truckers and allows logistics companies to deal with any upfront costs such as diesel and driver’s allowance.
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.
With less competition, Amadi-Emina explained that all these features will drive Pivo to capture a sizable portion of a $4 billion addressable market opportunity.
The startup currently serves about 500 SMEs as direct customers and makes revenue by charging interest on capital and fees on payments processed. Pivo Capital which is one of its products has disbursed over $3 million to SMEs and currently records a 98% repayment rate while transaction volume on Pivo Business grew over 400% between April and September this year. The startup has registered a total volume of $4.7 million from July to date, according to Amadi Emina.