Nigerian fintech and lending startup Lidya has announced that it has completed its $8.3 million pre-Series B funding round.
The funding round was led by Alitheia Capital via its uMunthu Fund. Other investors that participated include Bamboo Capital Partners, Accion Venture Lab and Flourish Ventures.
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.
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According to TechCrunch, 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 claims 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 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.
What the new funding will be used for
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.
Lidya will use this new funding round 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 grow out its teams in Lagos, Prague and Warsaw.
What they are saying
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.”