Nigeria-based digital bank Lidya landed a fresh round of funding, reports Julie Muhn at Finovate. The bank pulled in a Series A round totaling $6.9 million, an amount that marks the round as one of Nigeria’s largest tech investments.
Combined with the $1.25 million Lidya received last March, the latest round brings the bank’s total funding to $8.2 million.
Omidyar Network led the round and was joined by new investors, Alitheia Capital, Bamboo Capital Partners, and Tekton Ventures; as well as existing investors Accion Venture Lab and Newid Capital. Ameya Upadhyay, principal at Omidyar Network, is slated to join Lidya’s board of directors.
“We are excited by the overwhelming support from the investor community, which signals a great confidence in our business model and team,” says Ercin Eksin, Lidya’s co-founder. Lidya will use the funds to expand its loan book, scale in Nigeria, enter new markets in Africa, and onboard more employees, specifically data scientists and engineers.
“Access to flexible, affordable credit is at the crux of unlocking growth in the MSME [microfinance, small and medium enterprise] sector. Lidya is addressing that by using smart algorithms to analyse transaction data from small businesses to assess their creditworthiness,” says Upadhyay. “This data-driven approach allows the company to offer loans without the need of hard collateral – a requirement that has scuttled MSME financing in Africa. In the process, Lidya gathers insights that help expand its product portfolio to become a holistic partner to small businesses.”
To help businesses smooth lumpy cashflow held up in invoices, Lidya lends from $500 to $50,000 without requiring the business to visit a physical branch.
Since it was founded in 2016, Lidya has extended 1,500 loans to help SMEs in industries ranging from farming to technology. The bank was recently accepted into MasterCard’s Start Path Program, an accelerator programme that supports the next generation of commerce solutions.