Nigeria’s Piggybank.ng, an online and mobile app savings platform, announced that it has raised USD 1.1 M 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, according to TechCrunch.
The startup, 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, in a country where up to two years’ rent is often required upfront to secure a home
The scheme which targets low-middle income savers in Nigeria, of which there are 26.5M with a market size of $2.2Bn, the fintech start-up is an automated savings platform where savers manage their finances by depositing small amounts of money [starting 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 company will deploy the VC investment for license acquisition and product development. Piggybank.ng has recorded 20 – 35% m-o-m growth in user traction over the past 12 months; primarily from peer-to-peer recommendations, its referral program – Piggybank Stories, and grass-roots social media campaigns.
The startup will also invest in additional marketing spend, to accelerate its growth trajectory. Having completed accelerator programs with Blackbox, the Cc Hub’s Pitch Drive, powered by Google for Entrepreneurs, and Google Launchpad Africa, Piggybank.ng has built a savings community of over 53,000 registered users of which approximately 60% are Nigerian Millennials, who have saved in excess of $5M, with a savings growth of 3000% between 2016-17.
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.”
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.”
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.”
Piggy Bankers save an average of N20,000 per month [approx USD$55] and in contrast to conventional bank savings accounts, the platform restricts withdrawals until an agreed date or users can withdraw their savings on a quarterly basis, whereby savings drawn outside of the agreed day attract a 5% early withdrawal fee.