Most Small and Medium Enterprises (SMEs) in supply chains across various sectors in Africa fulfill orders within days but receive invoices after several weeks and sometimes months. It’s an inefficient way of doing business that ultimately leads to cash flow problems – and on top of that there’s fragmented payment collection and tracking processes.
Recently, startups have taken a top-down approach by defining a specific sector and offering solutions to the SMEs within it. One of these startups is bifohelping shippers get paid faster by providing a bank account, debit card, and digital billing tools to track payments.
The startup was founded by Nkiru Amadi is honest And the Ijuma Akkuyu In July 2021, it is announcing today that it has closed a $2 million seed round. In a statement, Pivo said it intends to use the funding to update existing products, build new ones, hire talent, and expand beyond Lagos, its first market, and other African countries, particularly in East Africa.
Pivo provides financial services—management of credit, payments, and expenses—to small and medium-sized business vendors within large manufacturing supply chains, an industry whose trade Amadi-Emina, CEO, did before starting the one-year-old startup, which 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 it later acquired. Kobo 360, one of the leading e-logistics players in Africa. During her tenure at Kobo360 — first as a corporate account manager and until leaving as head of port operations — she witnessed the glaring liquidity problems that existed at both ends of the logistics supply chain. Truck drivers need cash advances from logistics companies like Kobo360, Lowry systems And the MVX To transport goods Meanwhile, these companies also require manufacturers to pay on time to distribute goods to truck drivers.
“In most cases, we found out that cash flow management was the core issue for these companies — it was either non-existent or was just paper-based,” Amadi-Emina told TechCrunch in an interview. “A lot of payments were made in cash, and we believed in building a digital bank that would provide financial services geared towards solving these diverse problems of SME vendors operating within large manufacturing supply chains, starting first and foremost with logistics service providers, and then gradually moving into the pockets of suppliers.” And at the end of things.”
Pivo leverages manufacturing supply chain relationships and deploys financial services to small and medium businesses within it, mostly truck drivers in this case. The credit play of its platform, Pivo Capital, acts as an alternative to early payment for truck drivers and allows logistics companies to handle any upfront costs — such as driver allowances and diesel — that would normally be incurred during operations. Pivo Business, its payments settlement arm, helps these small businesses facilitate payments via peer-to-peer transfers and track debit card payments with spending controls. Amadi-Emina explained that all of these features will drive Pivo to capture a significant portion of the $4 billion addressable market opportunity.
It’s a huge market in which Pivo has a first-mover advantage. And while it doesn’t seem to have any noteworthy competitors in the freight segment, start-ups like Duplo, another YC subsidiary whose clients are small and medium-sized fast-moving consumer goods (FMCGs), are serious competition for Long term when platforms look for other sectors to replicate growth. However, in their sector, there are also some concerns that e-logistics companies can create a similar platform in-house (eg, Kobo360’s Payfast).
“As a complete, integrated solution, we’ve always been more complementary than competitive,” the CEO told TechCrunch when asked about Pivo’s opportunities if e-logistics companies launch a competing product. “If you look at e-logistics companies, their goal is to move towards a platform approach, and if they ever want to open up financial services, we’re asking them to come to PIVO for that instead of going the traditional way of banking.”
The shipper-focused digital bank currently serves around 500 small and medium-sized businesses as direct customers and generates revenue by charging interest on principal and fees on payments processed. Amadi Amina said that Pivo Capital has spent more than $3 million on SMEs and is currently recording a 98% repayment rate while the volume of transactions in Pivo Business grew by more than 400% between April and September of this year. The startup has recorded a total volume of $4.7 million from July to date.
What’s next for a female-led startup? More growth, according to its CEO. The company is working on Pivo+, a package of value-added services that will turn Pivo into a full-fledged financial services platform. Mercy Corps chief investment officer Daniel Block, one of the investors in this round, believes Pivo is designed to become such a platform because the startup’s commitment to an unpatrolled small and medium supply chain will enable it to carve out a deep moat in the competition. Fintech lending space. “
Other seed round investors include Precursor Ventures, Vested World, FoundersX and Y Combinator, with Amadi-Emina and Ijeoma Akwiwu pulling off the impressive feat of being the first all-female founding team backed by Nigeria’s famous accelerator program – and a runner-up in Africa after the defunct Ghanaian startup Tress.
“It’s great that we were able to break this barrier as a female-led startup. Joining YC gave us validation as founders and cemented the fact that women can take charge in technology,” Amadi Emina said of the achievement. “Tech is a male-dominated place.” And all these man-made barriers keep women out. Reach out to YC, with news amplified not just locally but internationally means more people see strong female representation coming from Nigeria. We are glad that the founder somewhere is looking at us and gaining awareness that it is possible that if you keep working hard, applying yourself and having the numbers to back it all up, you can achieve what you set out to do. “