Nigeria’s Piggybank.ng, an online and mobile app savings platform, announced that it has raised USD 1.1 Mn in Seed Funding from High Net Worth Individuals, led by Olumide Soyombo, Founder of LeadPath Nigeria, and with participation from International and Pan-African investors Village Capital and Ventures Platform.
The startup that targets the African Millennials will deploy the VC investment for license acquisition and product development. Founded in 2016 by Somto Ifezue, Odunayo Eweniyi and Joshua Chibueze, graduates of Covenant University, Nigeria, Piggybank.ng is positioned to fill a void for tens of millions of Nigerians, who have no access to credit.
Odunayo Eweniyi, Co-Founder and COO of Piggybank.ng says: “In a country such as Nigeria, almost everything has to be paid in advance. The majority of Nigerians struggle to save their income, manage cash flow and build credit, which is a huge problem as around 80% of Nigerians need to save a minimum of 40% of their monthly income, to survive. This is the sheer scale of the challenge we are embracing; to actively promote a savings culture in Nigeria and act as the savings infrastructure to millions of people who want a safe, transparent and innovative platform to assist them in managing their finances, on their journeys to financial freedom.”
The low-middle income savers in Nigeria form a market size of USD 2.2Bn with 26.5 Mn individuals. The fintech start-up’s product is meant to address the needs of this segment. Users can manage their finances by depositing small amounts of money from as little as USD 1/day on a daily, weekly or monthly basis, depending on their saving target, free of charge. Savers can expect to earn on average 6% per annum on automated savings or 10.95% per annum on the fixed deposit product, Safelock and can withdraw funds once per quarter. Piggybank.ng generates its revenues through asset management, which currently stands at 5 – 7%.
The team has so far depended on peer-to-peer recommendations, for customer acquisition and claims to have recorded an M-O-M growth in the range of 20-35%. They also plan to invest in additional marketing spend, to accelerate its growth trajectory.
Joshua Chibueze, Co-Founder and CMO of Piggybank continues: “Today’s announcement allows us to expand and capitalise on the many opportunities that the market presents us with. Our growth so far has been stimulated almost entirely by peer-to-peer advocacy and our investment in the highest quality customer service, so we know the market is there, and the product has been built, modified, tested and ratified by users. With this fundraise, we can invest significantly in our people and products, as we build a digital financial warehouse accessible to millions of Africans whose savings woes we want to put firmly behind them.”
Piggybank.ng mentioned that it has created a savings community of over 53,000 registered users of which approximately 60% are Nigerian Millennials, who have saved over USD 5 Mn, with a savings growth of 3000% between 2016-17.
Olumide Soyombo, Co-Founder Leadpath adds: “Piggybank.ng is a leading example of how Africans are innovating to solve African problems. In this case, the team is applying technology and innovation to solve a problem facing millions of Nigerians; how can they accrue enough money to make down-payments on so many ‘life events,’ in a market where there’s little to no access to credit? Led by a solid and experienced executive team, who have recorded significant growth after two years of bootstrapping, and have built a product that is ready to scale, I’m excited to have led other local angel investors this investment round, and to now work closely with the team to grow the platform.”
The startup recently acquired a micro-financing license from the Central Bank of Nigeria [CBN], which provides the appropriate regulatory cover, allowing them independence from partnering with banks.
A recent survey conducted by Piggybank.ng, which saw 5,000+ responses, revealed that the top 5 areas Nigerians are saving for include investments, starting a business, rent and unforeseen circumstances e.g. health and vacations. Co-founder and CEO, Somto Ifezue concludes, “The research reveals that our savers are hard working, focussed, and serious about reaching their savings goals. Already, we are seeing thousands of our users reaping the benefits of addressing their financial future by weaving Piggybank.ng into their daily lives, making it a savings ritual. We’re looking forward to helping thousands more in the coming months and years reach their financial goals”.