Nigerian fintech Lidya raises $6.9m in Series-A round led by Omidyar Network [Updated]

Nigerian fintech startup Lidya has announced that it has raised $6.9-million in a Series A round led by Silicon Valley-based philanthropic investment firm Omidyar Network.

The startup’s platform assists small African businesses to manage their funds as well as access credit. The startup was founded in 2016 by Tunde Kehinde, and Ercin Eksin.

In an announcement in a statement yesterday (23 May) Lidya said the funding will be used to scale operations in Nigeria, as well as to launch in new markets in Africa, in addition to hiring more staff and expanding the company’s loan book.

A total of five investors: Alitheia Capital, Accion Venture Lab, Bamboo Capital Partners, Newid Capital, and Tekton Ventures also participated in the round which saw Omidyar Network investment principal Ameya Upadhyay joining Lidya’s board.

Lidya plans to use the funding to scale in Nigeria, hire more staff, expand its loan book , and launch into new markets in Africa,

“We are excited by the overwhelming support from the investor community, which signals a great confidence in our business model and team,” said Eksin.

Upadhyay said the startup — through its algorithms which analyse data from small businesses to assess creditworthiness — was able to provide flexible and affordable credit, which he said is “at the crux of unlocking growth” for small and medium sized businesses.

“This data-driven approach allows the company to offer loans without the need of hard collateral, a requirement that has scuttled MSME (micro, small, and medium-sized enterprises) financing in Africa,” said Upadhyay.

Since its launch, Lidya claims it has provided over 1500 loans to business operating in retail, farming, tech, hospitality, and logistics.

Last year, the startup — which is a participant of the MasterCard Start Path Programme — raised $1.25-million in a seed round led by Accion Venture Lab.

Editor’s note (30 May 2018): Subsequent to the publication of this article, Ameya Upadhyay, investment principal at Omidyar Network, responded to Ventureburn’s request for comment on the deal, saying it is the funder’s policy not to disclose equity stake or size of individual investments, “as we consider that proprietary information”.

When asked how the deal had come about, Upadhyay said the funder had known Lidya “for more than one and a half years” and have been following the progress of the company since its inception.

“Beyond a solid, experienced team, who has deep knowledge of the local context and challenges, we were also very excited by the traction of the company in the market, even at this early stage,” he added in an email to Ventureburn.

Featured image (left to right): Lidya founders Ercin Eksin and Tunde Kehinde (Supplied)