Nigeria-based fintech startup, Payhippo, has been accepted into Y Combinator’s Summer 2021 cohort, joining 167 startups, four of which are African.
Launched in January 2020 by Zach Bijesse (CEO), Chioma Okotcha (COO), and Uche Nnadi (CTO), Payhippo is working to bridge the gap between small business owners and the finances needed for the growth of their businesses. The startup is poised to solve the capital needed by the over 40 million small and medium-sized businesses in Nigeria and other African countries. Some of the problems these SMBs face range from lack of collateral, high-interest rates from traditional lenders such as banks, etc. So far, the startup claims to have disbursed more than 3,000 loans of over $4.1 million since launch and is looking to go far beyond this in no time.
Four weeks ago, Payhippo raised a $1million pre-seed round, with participation from VCs such as Ventures Platform, Future Africa, and Launch Africa. It is now set to receive $125,000 in seed funding, as well as other networking and mentorship opportunities from Y Combinator. In return, the startup will cede 7% of its stakes to Y Combinator.
Chioma Okotcha, COO of the startup said in an interview that, it was difficult at first to cede that much of the startup to the accelerator program.
“We had mixed feelings at first because 7% of your company is a lot to give up. We called up a few YC alumni from our market and got their input. Ultimately, we went with Y Combinator because we saw how much we could learn from the YC partners and the overall network.”
As a business financing platform focused on Small and Medium Enterprises (SMEs), Payhippo helps SMEs access loans and build their credit history with an average monthly loan size of $1,600 from which they make $96 — a 6% interest.
So far, the startup claims to have disbursed more than 3,000 loans of over $4.1 million since launch and is looking to go far beyond this in no time.
The startup seeks to expand both in team size and its reach on the African continent. Hence, they believe this new opportunity of being selected for Y Combinator’s cohort will help and guide them in achieving their goals.
“We believe it’s already paying dividends both for operations as the brand name and global recognition of Y Combinator has brought interest from lending capital partners… The YC brand name signals to the job market that working at Payhippo means people can contribute and do meaningful work.”
Okotcha explains that expansion plans for the startup include growing the team by hiring more people and increasing their talent channel.
“We’ve been hiring like crazy, investing in and looking to hire a head of finance, engineers, and SME salespeople. It is exciting to see an increase in our talent pipeline now as we have joined YC. We’re always looking for more talent, so reach out to introduce yourself.”