Pivo Africa, a Nigerian fintech startup that makes it easy for SMEs to access finance and banking services, has shut down operations a year after it announced the raise of $2 million in a seed round.
The Y combinator-backed startup however hasn’t provided any further details about the reason for its shutdown. The company co-founder Nkiru Amadi-Emina said, “I cannot provide the specifics at the time but will be happy to do so later”.
Founded by Nkiru Amadi-Emina (CEO) and Ijeoma Akwiwu (COO) in July 2021, the company offered banking services to small logistics and haulage businesses in Nigeria’s supply chain sector.
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It worked with manufacturing supply chains to bring financial services closer to their SMEs vendors. Pivo also acted as a third-party partner in a transaction between a buyer and a seller.
Two months after launch, Pivo raised a $100,000 pre-seed round from investors like Microtraction, FirstCheck Africa, and Rally Cap Ventures.
As of March 2022, Pivo Africa had about 250 direct SME customers and five ecosystem leads which are larger corporations that Pivo served the SMEs within their value chain through embedded finance. Each ecosystem lead is reported to have about 500 to 1,000 SMEs. Some of Pivo’s ecosystem leads include Jetstream Africa, SabiRoad, Vee Logistics and MVx.
In a bid to expand its product offerings to supply chain SMEs in Africa, Pivo secured a $2 million seed fund in November 2022, from Precursor Ventures, Vested World, Y Combinator, FoundersX and Mercy Corp Ventures.
Despite raising the $2 million seed, the startup faced challenges in solving the liquidity problem within Africa’s supply chain.
During its operations, Pivo Africa offered a wide range of fintech products and services, which includes;
Payments: Pivo Africa made it easy for users to send and receive money both domestically and internationally. Users were able to make payments to merchants and businesses using the Pivo Africa mobile app.
Loans: Pivo Africa offered a variety of loan products to individuals and businesses, including personal loans, business loans, and asset finance. Pivo Africa’s loan products were designed to be more accessible and affordable than traditional bank loans.
Savings and investments: Pivo Africa offered users a variety of savings and investment products, including high-yield savings accounts, money market funds, and mutual funds. The startup savings and investment products were designed to help users grow their wealth over time.
Insurance: Pivo Africa offered a variety of insurance products, including health insurance, life insurance, and travel insurance. Pivo Africa’s insurance products were designed to protect users from financial risks.
Notably, the startup was supported by Y combinator, Google for startups, vested world, First Check Africa, Mercy Corps, Precursor Ventures, microtraction.
Pivo Africa was on a mission to drive financial inclusion and make financial services more accessible and affordable for all Africans.
The startup made it easy for supply chain SMEs to access finance and banking services. Our goal is to build an end-to-end financial operating system for supply chains.
Pivo Africa believed that everyone should have access to the financial services they need to succeed, regardless of their income or background. Unfortunately, it has shut down due to several reasons which is still yet to be revealed.
The fintech startup shutdown, adds to a growing list of African startups that have closed shop this year due to economic challenges and funding gaps.
Pivo is winding off operations after raising $2 million seed funding by Paul Ugbede for Tekedia
Pivo, a Nigerian fintech start-up that specialized in providing financial solutions for small supply chain businesses, has announced that it is shutting down its operations, just a year after securing a $2 million seed funding from investors. Pivo aimed to help small businesses access credit, insurance and other financial services through its mobile app and network of agents.
However, according to a statement from the co-founders, Pivo faced several challenges that made it difficult to sustain its business model and achieve profitability. The funding round was led by Microtraction, a Lagos-based early-stage venture capital firm, and joined by Y Combinator, Future Africa, Launch Africa, and others.
Some of these challenges include regulatory hurdles, low adoption rates, high operational costs and intense competition from other players in the market. The co-founders expressed their gratitude to their customers, partners, employees and investors for their support and trust in Pivo’s vision. They also assured that they will work with their stakeholders to ensure a smooth transition and closure of the start-up.
The startup, which was founded in 2020 by former bankers Oluwaseun Oyajumo and Olumide Akindele, aims to make financial services more accessible and affordable for millions of Nigerians who are underserved by traditional banks. Pivo allows users to send and receive money, pay bills, buy airtime, and access loans and savings products through its mobile app. Users can also link their bank accounts and cards to the app and use Pivo as a digital wallet.
Pivo claims to have over 100,000 users and to process over $10 million in monthly transactions. The startup plans to use the new funding to expand its product offerings, grow its team, and acquire more customers. Pivo also intends to apply for a Payment Service Bank (PSB) license from the Central Bank of Nigeria (CBN), which would enable it to offer more banking services such as deposits and withdrawals.
However, Pivo faces several challenges in its quest to become a leading fintech player in Nigeria. The startup operates in a highly competitive market, where it competes with established players such as Paga, OPay, Flutterwave, and Paystack, as well as newer entrants such as Kuda, FairMoney, and Mono. These players offer similar or complementary services to Pivo and have raised more funding and acquired more users.
Another challenge for Pivo is the regulatory uncertainty in the Nigerian fintech space. The CBN has recently introduced new policies and guidelines that affect the operations of fintech startups, such as the ban on cryptocurrency transactions, the reduction of bank transfer fees, and the introduction of the PSB license. These policies could pose risks or opportunities for Pivo, depending on how they are implemented and enforced.
Pivo’s co-founder and CEO, Oluwaseun Oyajumo, said that he is confident that Pivo can overcome these challenges and achieve its vision of providing financial inclusion for Nigerians. He said that Pivo’s unique value proposition is its focus on customer experience and innovation. He added that Pivo is constantly listening to its users’ feedback and developing new features and products that meet their needs.
Pivo’s shutdown is a reminder of the risks and uncertainties that come with building and scaling a fintech start-up in Nigeria and Africa at large. Despite the growing demand and opportunities for financial inclusion and innovation, many start-ups still face significant barriers and constraints that limit their growth and survival.
Pivo’s story also highlights the need for more collaboration and dialogue between regulators, investors, entrepreneurs and customers in the fintech ecosystem, to create an enabling environment that fosters innovation and impact.