Lidya Raises $8.3 Million in Pre-Series B Funding Round to Scale Operations

Lidya, a leading lending fintech startup based in Nigeria, announced on Wednesday it has raised $8.3 million in a pre-series B funding round to scale operations.

Founded by Tunde Kehinde and Ercin Eksin in 2016, the lending startup has now raised a total of $16.5 million, this includes a $1.3 million seed fund in 2017 and $6.9 million in 2018.

The pre-Series B funding round was led by Alitheia Capital, through its uMunthu Fund. Bamboo Capital Partners, Accion Venture Lab and Flourish Ventures were the other investors.

Unlike most lending companies that raise debt financing to fund loans, Lidya uses equity to fund its loan book. Quite the unconventional method, but Kehinde explains why the company thought that path was necessary.

“The idea was for us to show that our algorithms work and that we can disburse money into the market and get it back. Then we can transition to using debt for our lending operations,” the CEO said as the company looks to finalize deals with banks, family offices, and hedge funds in the coming months. This is in addition to the $300,000 line of credit Lidya has secured from Bamboo Capital Partners.

Lidya began lending in Europe at the height of the pandemic. Kehinde recounts how tough it was for the team, especially in a period that was so unusual.

“It is difficult enough to attempt to launch in two new countries but try doing that remotely,” he said. “We’re so decentralized. We had operations in Nigeria, and we were launching in Eastern Europe remotely, making sure the puzzle stays together. The team really stepped up. Everyone doubled down on the mission and we came out of the year without having any deterioration.”

Speaking on the investment, Alitheia Capital co-founder and managing director Tokunboh Ishmael said, “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 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.”