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

Most small and medium businesses (SMEs) that supply different sectors of Africa have orders executed in days, but invoices are received after several weeks or even months. This inefficient business model leads to cash flow problems and fragmented payment collection and tracking.

Recently startups have taken a top down approach, focusing on a specific sector and offering solutions to SMEs in that sector. Pivo , is one such startup. It helps freight carriers get paid quicker by offering a bank account, a digital invoice tool and a debit card.

The startup, founded by Nkiru Amadi-Emina and Ijeoma Akwiwu in July 2021, is announcing today that it has closed a $2 million seed round. Pivo stated that it plans to use the funding to upgrade its products, build new ones and hire talent. It also stated that it will expand beyond Lagos, its first market, and other African countries, especially in East Africa.

Pivo offers financial services — credit and payments, as well as expense management — to SME suppliers within large manufacturing supply chain. Amadi-Emina was the chief executive officer before she started the one-year-old startup. It has raised $2. 55 million since launch.

In 2017, Amadi-Emina launched an on-demand delivery platform targeted at e-commerce brands in North and Central Africa, which subsequently got acquired by Kobo360, one of Africa’s most prominent e-logistics players. It was during her time at Kobo360 — first as an enterprise account manager and up until she left as head of port operations — that she witnessed the glaring liquidity problems that existed at both ends of the logistics supply chain. Truckers need cash advances from logistics companies such as Kobo360, Lori Systems and MVX to move cargo; meanwhile, these companies also require manufacturers to pay on time for distributing cargo to truckers.

” In most cases, managing cash flow was the primary problem for these businesses,” Amadi Emina said to TechCrunch in an interview. “A lot of payments were made with cash so we decided to create a digital bank to provide financial services to solve these problems for SME vendors who operate within large manufacturing supply chains. We started with the logistics providers and then moved to the supplier pockets and the tail end of things .”

Pivo leverages supply chain relationships in manufacturing and provides financial services to SMEs within these networks, mainly truckers. Pivo Capital, its credit play, provides truckers with an alternative to paying upfront. It also allows logistics companies to pay for any costs such as diesel or driver’s allowance that are typically incurred during operations. Pivo Business, the payments reconciliation arm of Pivo, allows these small businesses to make peer-to-peer payments and track payments using debit cards with spend control. Amadi-Emina stated that these features will allow Pivo to capture a significant portion of the $4 billion market opportunity.

It’s a large market where Pivo holds the first-mover advantage. Although it doesn’t appear to have any notable competitors in the freight sector startup Duplo, another YC alumnus, whose customers include SMEs in fast-moving consumer goods space (FMCG), pose serious competition in long-term when platforms seek out other sectors for growth. That said, within its sector, there’s also some concern that e-logistics companies can construct a similar platform in-house (case in point, Kobo360’s Payfasta).

“When TechCrunch asked about Pivo’s chances of launching a rival product, the chief executive stated that Pivo is a plug-and play and embedded solution. “If you look at elogistics firms the goal is to move toward a platform approach. If they want to unlock financial service, we tell them that PIVO is the best place to go.

The Pivo team

The freight carrier-focused digital bank currently serves about 500 SMEs as direct customers and makes revenue by charging interest on capital and fees on payments processed. Amadi-Emina said Pivo Capital has disbursed over $3 million to SMEs and currently records a 98% repayment rate while transaction volume on Pivo Business grew over 400% between April and September this year. From July to date, the startup has recorded a total volume in excess of $4.7 million.

What’s next for the female-led start-up? According to its CEO, there will be more growth. Pivo is a package that offers value-added services, which will make Pivo a fully-fledged financial platform. One of the investors in this round was Daniel Block, an investment principal from Mercy Corps. He believes Pivo is destined to be such a platform because of its “commitment unattended supply chain SMEs would allow it to quickly carve out a deep moat within the competitive fintech lending area .”

Precursor Ventures and Vested World were also part of the seed round. Y Combinator was founded by Amadi-Emina Akwiwu and Ijeoma Awiwu, who have achieved the remarkable feat of being the first all female-founded team that the renowned accelerator has backed in Nigeria. This is in addition to the second in Africa following the defunct Tress startup in Ghana.

“It’s a great thing we were able break that barrier as a female-led startup. Getting into YC gave our founders validation and cemented that women can lead tech companies,” Akwiwu, chief operating officer, said of the achievement. “Tech is a male-dominated industry and all these man-made barriers are there to keep women out. With the news amplified both locally and internationally, more people see strong representation from Nigeria in YC. We are glad that a female founder looks at us and realizes that it is possible to achieve what you want .”