Investment of $4.5 million boosts expansion of invoice financing in Nigeria for Zuvy
In the bustling heart of Nigeria, a new player in the financial landscape is making waves: Zuvy, an invoice financing company that aims to revolutionize the way small businesses manage their finances. Founded in 2021 by Angel Onuoha and Ahmad Shehu, Zuvy offers a user-friendly platform designed to address the transmission failure of commercial banking credit in Nigeria, a key factor contributing to Africa's $300 billion SME financing gap.
Millions of small businesses on the African continent have capital tied up in receivables, a challenge that Zuvy aims to tackle head-on. By providing invoice management software, Zuvy eliminates the inefficiencies and expensive errors tied to traditional pen-and-paper methods, creating significant operational benefits for buyers.
One of the key advantages Zuvy offers is its integration with WhatsApp, allowing vendors to generate and dispatch invoices directly to their buyers without the need for an online application. This feature, coupled with the ability to offer advance payments to vendors within a 24-48 hour time frame, provides more convenient access to funds for vendors who often face time constraints in servicing their agreements with clients.
Zuvy has recently raised $4.5 million in funding, a mix of debt and equity, from TLG Capital and other investors. The funds will be used to expand Zuvy's reach and meet the growing demand from Nigerian vendors. Isaac Marshall, an investment professional at TLG Capital, acknowledged the potential of factoring invoices to bring capital to small businesses in Africa, provided a scalable tech stack can be built.
In contrast to traditional banking loans, Zuvy's model offers a more flexible and accessible financing option. It operates on an invoice-based financing system, providing financing based on outstanding invoices. This model leverages the credibility of large buyers to reduce risk, and does not require traditional collateral or lengthy approval processes.
Moreover, Zuvy offers short-term credit with loan durations of 60 to 90 days, making it more suitable for businesses with immediate cash flow needs. The lack of collateral requirements and streamlined process for accessing funds also sets Zuvy apart from traditional banking channels, which often involve complex paperwork and delayed access to capital.
Zuvy's CEO, Angel Onuoha, a Harvard College alumnus, plans to expand the startup's reach within Nigeria first before expanding into other African countries. With Nigeria's interest rate at 18.5%, which is too high for vendors to secure loans from banks, Zuvy's offer of cash upfront to vendors to meet their business needs is a welcome solution for many.
In essence, Zuvy's primary goal is to empower these businesses with the liquidity they need, when they need it. By providing a more flexible and accessible financing option, Zuvy is set to make a significant impact in the financial landscape of Nigeria and beyond.
- Zuvy, a financing company, recently received $4.5 million in funding from TLG Capital and other investors, which they plan to use to expand their reach and meet the growing demand from Nigerian vendors.
- The technology-driven Zuvy offers a user-friendly platform that not only provides advance payments to vendors within a 24-48 hour time frame but also allows vendors to generate and dispatch invoices directly to their buyers via WhatsApp.
- In contrast to traditional banking loans, Zuvy's invoice-based financing system offers a more flexible and accessible option, as it leverages the credibility of large buyers to reduce risk, requires no traditional collateral, and has a streamlined process for accessing funds.
