Nigeria’s Piggybank.ng, an online and mobile app savings platform targeted at African Millennials, has announced that it closed on Seed Funding of $1.1M, 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 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 CcHub’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.
In addition to securing its Seed Funding of $1.1M, Piggybank.ng has recently acquired a micro-financing license from the Central Bank of Nigeria [CBN], which provides the relevant regulatory cover, allowing them independence from partnering with banks. As of June 2018, the company will also be expanding its product range to include Smart Target, a group savings tool, that can be scaled from family-size to large corporations, based on the age-long West African tradition of ajo or esusu to leverage the power of communal savings and harness the network effect of accountability.
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, in order 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.”
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. Targeting 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%.
Speaking on the investment, Olumide Soyombo, Co-Founder Leadpath said 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”.