Most of the small and medium enterprises (SMEs) in the supply chain across different sectors in Africa fulfill orders within the same day but receive invoices in weeks and sometimes months. It’s an inefficient way of doing business, which ultimately leads to cash flow problems — and above all, fragmented payment tracking and collection processes.
Recently, startups have adopted a top-down approach by picking out a specific niche and providing solutions to SMEs in that field. Such a startup is turnhelps freight carriers get paid faster by providing bank accounts, debit cards and digital invoicing tools to track payments.
Start-up company founded by Nkiru Amadi-Emina and Ijeoma Akwiwu in July 2021, announced today that they closed a $2 million seed round. Pivo, in a statement, said it intends to use the financing to upgrade existing products, build new ones, hire talent and expand outside of Lagos, its first market. and other African countries, especially in East Africa.
Pivo provides financial services — credit, payments, and cost management — to SME suppliers in the large manufacturing supply chain, said Amadi-Emina, the industry’s chief executive officer, through the transaction. before founding the one-year-old startup that has raised $2.55 million since launch.
In 2017, Amadi-Emina launched an on-demand delivery platform targeting e-commerce brands in North and Central Africa, which was later acquired by Kobo360, one of Africa’s most prominent electronic logistics players. During her time at Kobo360 — first as a corporate account manager and until leaving her position as port executive — she witnessed severe inventory liquidity problems. at both ends of the logistics supply chain. Truck drivers need cash advance from logistics companies like Kobo360, Lori . system and MVX to move goods; meanwhile, these companies also require manufacturers to pay on time for the delivery of goods to truck drivers.
“In most cases, we discovered that cash flow management is the main issue for these businesses – it’s non-existent or paper-based,” Amadi-Emina told TechCrunch in an interview. sheet. “A lot of payments are done in cash and we thought about building a digital bank that provides financial services to solve these different problems for SME providers operating in the country. movement in the large manufacturing supply chain, starting with the logistics providers first and then gradually moving to the supplier’s pockets and at the bottom of everything.”
Pivo leverages its relationships in the supply chain to manufacture and deploy financial services to small and medium-sized businesses, mainly truck drivers in this case. Its platform credit game, Pivo Capital, serves as an early payment alternative for truckers and allows logistics companies to deal with any upfront costs — such as money. diesel fuel and driving allowance — usually incurred during operation. Pivo Business, its payment reconciliation arm, helps these small businesses facilitate payments through peer-to-peer transfers and control debit card payments. Amadi-Emina explains that all of these features will push Pivo to capture a sizable portion of the $4 billion positionable market opportunity.
It’s a huge market where Pivo has a first-mover advantage. And while there don’t seem to be any notable challenges in the freight sector, startups like Duplo, another YC alum, have SME clients in the region. the fast-moving consumer goods (FMCG) sector, creating serious competition in the long run as platforms look for other areas to replicate growth. That said, in its field, there is also some concern that e-logistics companies could build a similar platform in-house (the case in point is Payfasta by Kobo360).
“As an embedded and plug-and-play solution, we always praise rather than compete,” the executive told TechCrunch when asked about Pivo’s opportunity if e-logistics companies launch an competitive product. “If you look at e-logistics companies, their goal is towards a platform approach, and if at any point they want to unlock financial services we ask them to come with Pivo to do that instead of using traditional services. Bank.”
The freight-focused digital bank currently serves about 500 SMEs as direct customers and earns revenue by charging interest on capital and fees on payments made handle. Amadi-Emina says Pivo Capital has disbursed more than $3 million to SMEs and now records a 98% return while transaction volume on Pivo Business increased more than 400 percent from April to May. 9 years now. The startup has registered a total volume of $4.7 million from July to date.
What’s next for female-led startups? More growth, according to its CEO. The company is developing Pivo+, a value-added service package that will turn Pivo into a full-fledged financial services platform. Daniel Block, chief investment officer at Mercy Corps, one of the investors in the round, said that Pivo was designed to be such a platform because of the startup’s “commitment to businesses. SMEs in the unattended supply chain will help the company quickly create a deep hole in the competitive market. fintech lending space.”
Other investors in the seed round include Precursor Ventures, Vested World, FoundersX and Y Combinator, where Amadi-Emina and Ijeoma Akwiwu have achieved an impressive track record of becoming the first all-female team founded by the family machine. famed accelerator in Nigeria – and second in Africa after the now-defunct Ghanaian startup Tress.
“It’s amazing that we were able to break that barrier as a women-led startup. Joining YC has confirmed us as founders and reinforced the fact that women can take the helm in the tech space,” said Amadi-Emina on the achievement. this. “Technology is a male-dominated field and all these man-made barriers exist to keep women out. Joining YC, with news amplified not only in the country but around the world, means that many will see strong female representation coming from Nigeria. We’re glad that a female founder somewhere looked at us and realized that maybe if you keep working hard, giving your best and having numbers that support it all, you can I can achieve what I set out to do. .”