According to TechCrunch, investment firm Alitheia Capital led the funding round via its uMunthu Fund, with participation from other investors such as Bamboo Capital Partners, Accion Venture Lab and Flourish Ventures.
“Lidya is tackling the fundamental challenge of providing access to credit for dynamic small and growing businesses that otherwise have limited options for financing working capital to scale their businesses in Africa and Europe,” Alitheia Capital co-founder and managing director Tokunboh Ishmael said in a statement. “Alitheia Capital and Goodwell are pleased to be backing a team whose mission aligns with our objective of driving growth and social impact by enabling access and inclusion to finance and financial services.”
In addition to its latest round, Lidya has raised a total of $16.5 million to date from its 2017 $1.3 million seed round and $6.9 million Series A secured in 2018.
TechCrunch reports that co-founders Tunde Kehinde and Ercin Eksin launched their startup as a digital SME lending platform to help solve credit and financing issues back in 2016. Thus allowing businesses to create accounts and apply for loans ranging from $500 to $50,000 with 24-hour approval turnaround times.
They recognized this issue while working at their previous company, Africa Courier Express (ACE), and decided there was a need to offer lending services to the company’s clients. However, instead of entering new African markets as expected of the platform, Lidya co-founders decided to expand to Europe.
“We wanted to build a global business from day one given the size of the problem where there is a $3 trillion credit gap,” CEO Kehinde told TechCrunch. “We challenged ourselves not to limit ourselves to one market and went through some data before expanding to Europe.”
Rarely do we see expansion moves from African startups to European markets, but Kehinde is excited about the startup’s five-year progress and says there is more to come from it in the future.
“We’re really excited about the fact that we started in Nigeria and now our product is live in two European countries,” he said to TechCrunch. “Typically people come into Nigeria from other parts of the world but we’ve gone from Nigeria to other parts. We’re proud of the traction we’ve gotten in our push to build the biggest finance house for SMEs in our markets.”
With this new raise, Lidya plans to solidify its presence in its three keyy markets (including Poland and the Czech Republic). The investment also prompts adjustments for the company’s leadership structure in which co-founder Eksin has left Lidya to pursue other projects while Kehinde will stay on as the sole CEO.
Additionally, Lidya will be growing its teams in Lagos, Prague and Warsaw and use a portion of the new funds to support lines of credit as part of the company’s mission.