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 the SME payment bottleneck that slows down the industry’s supply chain. Small and medium-sized businesses take several days to receive an invoice after placing orders. Pivo increases payment for shipping companies by offering a bank account, a debit card and digital invoicing tools that track payments.
Launched in 2021 by Nkiru Amadi-Emina and Ijeoma Akwiwu, Pivo offers financial services including credit, payments and expense management to SME suppliers within large supply chains. These services make it easy for SMBs in the supply chain to make, receive and track payments.
Registration for the Tekedia Mini-MBA (6 February – 6 May 2023) has started. Click and register here. The cost is N60,000 or $140 for the 12-week program if you register by November 26, 2022. Beat the early bird for free books, discounts and other bonuses.
“We launched Pivo in 2021 with our credit product, Pivo Capital. Since then, we’ve launched Pivo Business, which offers business accounts with features like invoicing and bulk payments to help small and medium-sized businesses better manage their cash flow. We are focused on building an all-in-one financial services platform for supply chain SMEs and are delighted to have the support of our investors,” the company said.
Pivo said in a statement that it intends to use the funding to upgrade existing products, build new ones, hire talent and expand beyond Lagos, its first market, and other African countries, particularly in East Africa.
The startup, which has raised $2.55 million since launching, told TechCrunch in an interview that the prevalence of friction in companies’ cash flow management inspired its founders to seek solutions.
“In most cases, we found that cash flow management was the main problem for these businesses – it was either non-existent or only paper-based,” Amadi-Emina said. “Many of the payments were made in cash, and we thought of building a digital bank that offers financial services aimed at solving these various problems for SME suppliers operating within large production chains, primarily with the logistics suppliers, and then gradually moving to the supplier pockets and at the end of things.”
Pivo said it relies on manufacturing supply chain relationships and distributes financial services to the SMEs within them.
Truck drivers typically require an advance or full payment before leaving a depot for their destination – a situation that usually creates a vacuum in the supply chain. To solve this problem, Pivo has implemented the credit game to its platform, Pivo Capital, as an early payment option for truck drivers and allows logistics companies to handle any upfront costs such as diesel and driver allowance.
Pivo Business, its payment reconciliation arm, helps these small businesses simplify payments via peer-to-peer transfers and track debit card payments with spending controls, according to TechCrunch.
With less competition, Amadi-Emina explained that all of these features will propel Pivo to capture a significant portion of a $4 billion addressable market opportunity.
The startup currently serves around 500 SMEs as direct customers and makes money by charging interest on capital and fees on payments processed. Pivo Capital, which is one of their products, has disbursed over $3 million to SMEs and currently records a 98% return rate while transaction volume on Pivo Business grew over 400% between April and September this year. The startup has recorded a total volume of $4.7 million from July to date, according to Amadi Emina.
