“The real backbone of most economies is the small entrepreneur,” says Lidya founder Tunde Kehinde. Despite the fact that small business owners provide essential revenue and job growth around the world, they often struggle to get the funding they need to grow, or even to make ends meet. With these challenges in mind, Tunde co-founded Lidya with Ercin Eksin. The Lagos-based fintech platform seeks to give small businesses in Nigeria the working capital they need to expand operations and create jobs.

At Accion Venture Lab, we’ve been proud to partner with Lidya in their effort to support entrepreneurship, and we continue to be excited about this partnership. We’re not alone in our excitement — Lidya has raised $6.9 million in a Series A investment round, one of the largest in Nigerian tech history. The funding was led by Omidyar Network, and we joined new investors Alitheia Capital, Bamboo Capital Partners, Tekton Ventures, as well as existing investor Newid Capital in the round. We see strong alignment with these organizations and believe that together we will be able to support Lidya in its next phase of growth.

During our first year of investment, Lidya’s growth has been impressive. They’ve built out their online invoicing tool, which helps small business owners manage their short-term financing needs better. They leverage the data they glean from the platform to get smarter about invoice-based lending. Lidya now analyzes over 100 data points to determine whether a business will be fit for financing. Through this mostly digital underwriting process, they’ve been able to keep their non-performing loans low and maintain a high repeat loan rate.

To further support small business owners, Lidya has partnered with large organizations that work with smaller businesses within their value chain — they are key partnerships for business development and securitization of the loan. When we invested, the team had only a handful of enterprise partners but, by the end of 2017, Lidya had onboarded more than 50 enterprise partners, across a number of sectors, allowing for more diversification and lower portfolio risk. Moreover, Lidya has moved beyond just invoice discounting and has expanded their suite of financing options to merchant cash advances and supply chain finance as well.

Our follow-on investment in Lidya isn’t just about what they’ve accomplished so far, but also about the promise of what they can achieve in the future. There’s a massive market opportunity in Nigeria, and we believe that the team has only begun to scratch the surface.