Nigerian startup Zuvy has secured $4.5 million in funding to revolutionize SME financing in Africa by addressing the challenges faced by businesses in accessing capital for their operations.
Zuvy, founded in 2021 and operating out of Nigeria, specializes in providing innovative invoice financing and management tools for SMEs.
The co-founders, Angel Onuoha and Ahmad Shehu, share a passion for digitizing and providing financing solutions tailored to the unique needs of small businesses in Africa.
“When I first came to Lagos, I was helping one of my aunties run her food catering business, and I saw just how much of an impact that invoice financing could have had on her business,” shares Angel Onuoha, reflecting on his personal motivation for establishing Zuvy.
“This was primarily because most of her work is determined by large contracts that she would get from large oil and gas companies. They wouldn’t pay her for 30 or 45 days at a time, and I found that a lot of these payment delays are very common for vendors.”
Payment delays are a prevalent challenge faced by SMEs in Nigeria, where large corporations often take as long as 90 days to settle invoices for services rendered. This creates significant cash flow constraints for smaller businesses, adversely affecting their operations and growth prospects.
Zuvy aims to bridge this financing gap by providing invoice financing to SMEs, particularly in the fast-moving consumer goods (FMCG), healthcare, and supply chain sectors where payment delays are rampant.
By offering cash advances based on invoices issued by businesses, Zuvy enables SMEs to access the funds they are owed, reducing their dependence on delayed payments.
To ensure the legitimacy of each application, Zuvy collaborates closely with the businesses receiving the services. This approach not only verifies the authenticity of the invoice but also streamlines the repayment process.
Repayment terms, ranging from 30 to 90 days, are determined based on the specific needs of each business, allowing for flexibility and tailored financing solutions.
Zuvy’s innovative approach to SME financing has garnered support from investors, with TLG Capital leading the recent funding round. The funding, split between debt ($4 million) and equity ($580k), will enable Zuvy to expand its loan book and meet the increasing demand from vendors in Nigeria.
“TLG’s innovative approach to lending in Naira, a critical aspect of our operations, has demonstrated their deep understanding of the unique challenges and opportunities within our market,” says Angel Onuoha, expressing his enthusiasm for TLG Capital’s investment.
“Most importantly, their deal execution speed is unparalleled, and we are highly aligned with their mission in fostering the growth of SMEs on the continent.”