Lidya raises USD6.9 million in a Series A Round

Lidya

Lidya, the digital financial services platform focused on improving access to credit for micro-, small-, and medium-sized enterprises (MSMEs) in Africa, confirmed that it has raised USD6.9 million in a Series A investment round.

The funding was led by Omidyar Network, the Silicon Valley impact investment firm established by Pierre Omidyar, the founder of eBay, the company confirmed in a statement. New investors, Alitheia Capital (via the Umunthu Fund), Bamboo Capital Partners, and Tekton Ventures, also joined the round, which included existing investors Accion Venture Lab and Newid Capital.

“Lidya was founded on a simple, yet fundamental idea: technology can unleash and empower a generation of business leaders and entrepreneurs throughout Africa by revolutionizing how risk is assessed, credit is underwritten, and customers are banked,” said Tunde Kehinde, cofounder of Lidya.

“We are excited by the overwhelming support from the investor community, which signals a great confidence in our business model and team,” added Ercin Eksin, cofounder of Lidya.

Globally, MSMEs are one of the strongest drivers of economic development, innovation, and employment, and yet access to finance is frequently identified as a critical barrier to growth for these businesses. 40 percent of MSMEs in emerging markets are underserved when it comes to access to credit—representing an estimated $5.2 trillion credit gap. In Nigeria, where Lidya is based, the IFC estimates that there is an MSME credit gap of at least $25 billion.

“Access to flexible, affordable credit is at the crux of unlocking growth in the MSME sector. Lidya is addressing that by using smart algorithms to analyze transaction data from small businesses to assess their creditworthiness,” said Ameya Upadhyay, investment principal at Omidyar Network and Lidya’s newest board member. “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.”

The funds raised in the Series A round will allow Lidya to expand its loan book, scale in Nigeria, enter new markets in Africa, and bring in more skilled professionals, particularly data scientists and engineers.

Lidya has also been recently accepted into the MasterCard Start Path Program, a global effort to support innovative startups developing the next generation of commerce solutions.

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