Nigerian fintech and lending startup Lidya has announced the close of a $8.3 million pre-Series B funding round.
In 2017, Lidya raised a $1.3 million seed round and $6.9 million Series A one year later. This new funding brings Lidya’s total raised to $16.5 million.
The startup also announced that co-founder, Ercin Eksin has left the startup to begin other projects, leaving Kehinde as sole CEO.
Lidya will use this latest funding to grow its lending operations for small and medium businesses across its markets and also solidify its presence in the three markets. The company will also use the funding to build a more robust team in Lagos, Prague and Warsaw.
Founded in 2016 by Tunde Kehinde and Ercin Eksin, Lidya provides financing based on the cash flow in your bank account and without collateral.
The idea for Lidya came about when the founders saw the need to offer lending services while at their previous company Africa Courier Express (ACE). ACE was a last-mile e-commerce delivery company that provided logistics services to businesses and consumers.
On the platform, businesses can create accounts and apply for loans ranging from $500 to $50,000, with decisions made within 24 hours.
Lidya claims to use 100 data points to evaluate each applicant and build a credit score for them to assess credit risk. In October 2019, Lidya launched new lending operations in Poland and the Czech Republic. Since then, Lidya has claimed to have disbursed over $3 million to SMEs in the two countries. To date, the company has disbursed over 25,000 loans and claims to have more than a 90% customer repeat rate.
Currently, both European markets represent about 30% of Lidya’s disbursement volume while the overall default rate is less than 1%. Unlike most lending companies that raise debt financing to fund loans, Lidya uses equity to fund its loan book.
Speaking on the investment, Alitheia Capital co-founder and managing director Tokunboh Ishmael said, “Lidya is tackling the fundamental challenge of providing access to credit for dynamic small and growing businesses that otherwise have limited options for financing working capital to scale their businesses in Africa and Europe. Alitheia Capital and Goodwell are pleased to be backing a team whose mission aligns with our objective of driving growth and social impact by enabling access and inclusion to finance and financial services.”
In his remarks, Tunde Kehinde said he’s happy with the traction they have been able to build in the markets they are present in.
“We’re really excited about the fact that we started in Nigeria and now our product is live in two European countries. Typically people come into Nigeria from other parts of the world but we’ve gone from Nigeria to other parts. We’re proud of the traction we’ve gotten in our push to build the biggest finance house for SMEs in our markets.”