November 26, 2022
Pivo powers up Nigerian freight carriers with a bespoke digital bank, gets $2M seed funding

Most small and medium enterprises (SMEs) in provide chains throughout totally different sectors in Africa execute orders in days however obtain invoices after a number of weeks and typically months. It’s such an inefficient manner of doing enterprise that in the end results in cash-flow issues — and on prime of which are fragmented cost assortment and monitoring processes.

Not too long ago, startups have taken a top-down method by singling out a specific sector and delivering options to SMEs inside it. One such startup is Pivo, which helps freight carriers receives a commission sooner by offering a checking account, a debit card and digital invoicing instruments that monitor funds.

The startup, based by Nkiru Amadi-Emina and Ijeoma Akwiwu in July 2021, is saying at present that it has closed a $2 million seed spherical. Pivo, in an announcement, mentioned it intends to make use of the financing to improve present merchandise, construct new ones, rent expertise and increase exterior of Lagos, its first market and different African international locations, notably in East Africa.

Pivo gives monetary providers — credit score, funds and expense administration — to SME distributors inside massive manufacturing provide chains, an trade Amadi-Emina, the chief govt officer, plied her commerce earlier than beginning the one-year-old startup, which has raised $2.55 million since launch.

In 2017, Amadi-Emina launched an on-demand supply platform focused at e-commerce manufacturers in North and Central Africa, which subsequently received acquired by Kobo360, considered one of Africa’s most distinguished e-logistics gamers. It was throughout her time at Kobo360 — first as an enterprise account supervisor and up till she left as head of port operations — that she witnessed the obvious liquidity issues that existed at each ends of the logistics provide chain. Truckers want money advances from logistics corporations resembling Kobo360, Lori Methods and MVX to maneuver cargo; in the meantime, these corporations additionally require producers to pay on time for distributing cargo to truckers.

“Usually, we came upon that managing money stream was the first concern for these companies — it was both nonexistent or simply paper-based,” Amadi-Emina informed TechCrunch in an interview. “Lots of the funds made have been made with money and we thought to construct a digital financial institution that gives monetary providers geared in direction of fixing these numerous issues for SME distributors that function inside massive manufacturing provide chains, beginning at the beginning with the logistics suppliers, after which regularly transferring to the provider pockets and on the tail finish of issues.”

Pivo leverages manufacturing provide chain relationships and deploys monetary providers to the SMEs inside them, principally truckers on this occasion. The credit score play of its platform, Pivo Capital, serves as an early cost different for truckers and permits logistics corporations to take care of any upfront prices — resembling diesel and driver’s allowance — usually incurred throughout operations. Pivo Enterprise, its funds reconciliation arm, helps these small companies to facilitate funds by way of peer-to-peer transfers and monitor funds with debit playing cards with spend controls. Amadi-Emina defined that every one these options will drive Pivo to seize a large portion of a $4 billion addressable market alternative.

It’s an enormous market the place Pivo has the first-mover benefit. And although it doesn’t appear to have any noteworthy challengers within the freight sector, startups resembling Duplo, one other YC alum, whose prospects are SMEs within the fast-moving shopper items (FMCG) area, pose severe competitors in the long term when the platforms search out different sectors to duplicate development. That mentioned, inside its sector, there’s additionally some concern that e-logistics corporations can assemble an identical platform in-house (working example, Kobo360’s Payfasta).

“As a plug-and-play and embedded resolution, we’ve all the time been extra complimentary than aggressive,” the chief govt informed TechCrunch when questioned about Pivo’s possibilities if e-logistics companies launch a competing product. “For those who take a look at e-logistics companies, the objective for them is to maneuver in direction of a platform method and if at any cut-off date they wish to unlock monetary providers, we inform them to come back to PIVO for that as a substitute of going to the normal banks.”

The Pivo group

The freight service–targeted digital financial institution presently serves about 500 SMEs as direct prospects and makes income by charging curiosity on capital and costs on funds processed. Amadi-Emina mentioned Pivo Capital has disbursed over $3 million to SMEs and presently data a 98% compensation price whereas transaction quantity on Pivo Enterprise grew over 400% between April and September this yr. The startup has registered a complete quantity of $4.7 million from July to this point.

What’s subsequent for the female-led startup? Extra development, in line with its CEO. The corporate is engaged on Pivo+, a bundle of value-added providers that may flip Pivo right into a full-fledged monetary providers platform. Daniel Block, an funding principal at Mercy Corps, one of many traders on this spherical, thinks Pivo is designed to grow to be such a platform as a result of the startup’s “dedication to unattended provide chain SMEs would allow it to quickly carve out a deep moat within the aggressive fintech lending area.”

Different traders within the seed spherical embrace Precursor Ventures, Vested World, FoundersX, and Y Combinator, the place Amadi-Emina and Ijeoma Akwiwu have completed a powerful feat of being the primary all-female based group the famed accelerator has backed in Nigeria — and the second in Africa after the defunct Ghanaian startup Tress.

“It’s a good thing that we have been in a position to break that barrier as a female-led start-up. Stepping into YC gave us validation as founders and cemented the truth that ladies may be on the helm of affairs within the tech area,” mentioned Amadi-Emina of the achievement. “Tech is a male-dominated area and all these man-made obstacles exist that serve to maintain ladies out. Stepping into YC, with the information amplified not simply domestically however internationally means extra folks get to see robust feminine illustration coming from Nigeria. We’re glad {that a} feminine founder someplace appears at us and beneficial properties an consciousness that it’s potential that for those who hold placing within the laborious work, making use of your self and have the numbers to again all of it up, you’ll be able to obtain what you got down to.”

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